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This question belongs to Commerce Accounting
Accounting
?

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:

Answer & Solution
Correct Answer: Option A
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