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Arjun singh Asked a Question
June 5, 2020 10:50 pmpts 30 pts
  • UGC NET
  • Commerce

A company raises rs. 1,00,000 by issue of 1000, 10% debentures of rs. 100 each at a discount of 2% redeemable after 10 years. if the corporate tax rate is 40%,

A company raises Rs. 1,00,000 by issue of 1000, 10% debentures of Rs. 100 each at a discount of 2% redeemable after 10 years. If the corporate tax rate is 40%, what would be the cost of capital? (1) 6.82% (2) 5.98% (4) 5.5% (3) 6.18%
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  • Arjun singh
    thank you
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  • Kriti kishor thankyou
    hope this will hlp you
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  • Kriti kishor thankyou
    ohh yeah i did mistake... sry for that... bt according to formula u hv to add after adding and dividing that by 2 u'll get 99000......6200/ 99000 then u get 0.062 ...now multiply i...
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  • Kriti kishor Best Answer
    answer will be option no 3 i. e. 6.18%
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    Arjun singh
    can you pls check again this answer i guess something is not right with this because in formula you used + but in solution you used - why