A company issues new debentures of Rs.2 million, at par;the net proceeds being Rs.1.8 million. It has a 13.5 percent rate of interest and 7 years maturity. The company’stax rate is 52 per cent. What is the cost of debentureissue? What will be the cost in 4 years if the market valueof debentures at that time is Rs.2.2 million?

Answer rating: 100% (QA)

sues new debentures 2millln Rs Ner proceedings 8 18 million Re R RO I 13 5 Maturity ... View the full answer