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Determine the cost of debentures

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Reference no: EM133070580

Cost of Redeemable Debentures Indebted Ltd issued 10,000, 10% Debentures of Rs. 100 each, redeemable in 10 years' time at 10% premium. The cost of issue was Rs. 25,000. The Company's Income Tax Rate is 35%. Determine the cost of debentures if they were issued (a) at par (b) at a premium of 10% and (c) at a discount of 10%.

Reference no: EM133070580

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