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Please answer the above Questions in a detailed manner The face value of debenture is 31,000 with an interest rate of 20%. The interest is
Please answer the above Questions in a detailed manner
The face value of debenture is 31,000 with an interest rate of 20%. The interest is payable annually and the instrument can be redeemed only after 10 years at a premium of 7%. Further, the company is anticipated to issue non-convertible bonds at a discount of 3% to ensure the quick sale in the market. The corporate tax is 50%. Calculate the cost of a debenture. Guna Ltd. is planning to issue preference share with a face value of 3100 and a dividend of 15% payable. The shares are redeemable after 5 years at par. The company hopes to realize 595 per share now. Calculate the cost of preference capital. Star Ltd. is expected to declare a dividend of 15 per share, and the growth rate in dividends is expected to grow @ 10% p.a. The price of one share is 3200 in the market. What is the cost of equity capital to the companyStep by Step Solution
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