Question
A company issued 180 000 12% redeemable debentures with a par value of R100 per debenture. These debentures are currently trading at R102 per debenture.
A company issued 180 000 12% redeemable debentures with a par value of R100 per debenture. These debentures are currently trading at R102 per debenture. The debentures will be redeemed at a premium of 2% in five years time. The company tax rate is 28% per year.
(i) Calculate the cost of the debenture
(ii) Calculate the value of the debenture
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Computational Techniques In Economics And Finance
Authors: Constantin Zopounidis
1st Edition
1613245580, 978-1613245583
