What is the cost of debenture issue

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Problem

A company issues new debentures of Rs 2 million, at par; the net proceeds being Rs 1.8 million. It has a 13.5 per cent rate of interest and 7 year maturity. The company's tax rate is 52 per cent. What is the cost of debenture issue? Get the instant assignment help. What will be the cost in 4 years if the market value of debentures at that time is Rs 2.2 million?

Reference no: EM133910912

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