Question: answer 1. Davious Chomba Tapiwa PLC has in issue 10% debentures of a nominal value of K100. The market price is K90 ex-interest. Calculate the

answer 1. Davious Chomba Tapiwa PLC has in issue 10% debentures

answer

1. Davious Chomba Tapiwa PLC has in issue 10% debentures of a nominal value of K100. The market price is K90 ex-interest. Calculate the cost of this capital if the debenture is a) Irredeemable b) Redeemable in 10 years time Ignore taxation

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