Question: Aura Ltd. has issued 15% bonds amounting 6,00,000. The floatation costs are 5 percent. The company has also agreed to discharge the bonds at

Aura Ltd. has issued 15% bonds amounting 6,00,000. The floatation costs are 5 percent. The company has also

Aura Ltd. has issued 15% bonds amounting 6,00,000. The floatation costs are 5 percent. The company has also agreed to discharge the bonds at par in 4 equal annual instalments of principal sum starting at the end of year 2. The company is subject to a 35 percent rate of taxation. Find its cost of debt. (PVAF127% 53.5416)

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