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%
B. 7.0%
C. 6.5%
D. 6.0%
Answer: Option A
This Question Belongs to Commerce >> Accounting
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