Question 5 On 1 April 2008 Delta Lid issued 30,00,000, 6% convertible debentures of face value of 100 per debenture al par. The debentures are redeemable at a premium of 10% on 31.03.12 or these may be converted into ordinary shares at the option of the holder, the interest rate for equivalent debentures without conversion nights would have been 10% Being compound financial instrument, you are required to separate equity and debt portion as on 01.04.08 The present value of 1 receivable at the end of the end of each year based on discount rates of 6% and 10% can be taken as: 6% 10% End of year 0.94 0.91 2 0.89 0.83 3 3 0.84 0.75 0.79 0.68 4