$10\%$ R$150$ Debentures $,2\mathrm{.}5$ million issues $.$The debentures were issued one year ago and are redeemable in two instalments $$ half the amount at nominal value in two years$$ time and the other half at a premium of $5\%$ after a further three years. The current market price for the debentures is R$140$ without interest. Flotation costs on new issues are negligible and are therefore considered to be irrelevant. Additional information: $$ The current capital structure based on market values is considered as optimal. $$ The company tax rate is $28\%.$ calculate market value and cost of debentures