Determine the net proceeds to be received from the issue

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Question - Dover Ltd has opted to raise capital through the issue of 8% debentures with a nominal value of $40 million. The loan notes, which carry an effective interest rate that is 2.5% above coupon, have issue costs of $718,000, have been issued at a 2.1% discount, and will be repayable at the end of the five years at a 9% premium.

Required - Determine the net proceeds to be received from the issue of the loan notes. Prepare the amortisation schedule over the life of the instrument.

Reference no: EM133151102

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