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Commerce · Q208

Miscellaneous in Commerce

Graduate and Post Graduate · Commerce · question 208

Q208

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?

A.
6.82%
B.
5.98%
C.
6.18%
Answer
D.
5.5%

Answer: Option C

Solution

Answer: Option C
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