Q1363
A company wishes to issue 1,000 7% debentures of Rs. 100 each repayable after 10 years for which the company will have to incur the following expenses: Underwriting commission ⇔ 1.5% Brokerage ⇔ 0.5% Printing and Miscellaneous expenses ⇔ Rs. 1,000 The annual cost of capital would be:
A.
7.3%
AnswerB.
7.0%
C.
6.5%
D.
6.0%
Answer: Option A
Solution
Answer: Option A
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