2. A company issues new debentures of *2 million, at par; the net proceeds being 1.8 million....
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2. A company issues new debentures of *2 million, at par; the net proceeds being 1.8 million. It. has a 13.5 per cent rate of interest and 7 year maturity. The company's tax rate is 52 per cent. What is the cost of debenture issue? What will be the cost in 4 years if the market value of debentures at that time is 2.2 million?
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