A company raises Rs. 1,00,000 by issue of 1000, 10% debentures of Rs. 100 each at a discount of 2% redeemable after 10 years. If the corporate tax rate is 40%, what would be the cost of capital?1. 6.82%2. 5.98%3. 6.18%4. 5.5%

A company raises Rs. 1,00,000 by issue of 1000, 10% debentures of Rs.

1.	A company raises Rs. 1,00,000 by issue of 1000, 10% debentures of Rs. 100 each at a discount of 2% redeemable after 10 years. If the corporate tax rate is 40%, what would be the cost of capital?1. 6.82%2. 5.98%3. 6.18%4. 5.5%
A.	1
B.	2
C.	3
D.	4
Answer» D. 4

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A company raises Rs. 1,00,000 by issue of 1000, 10% debentures of Rs. 100 each at a discount of 2% redeemable after 10 years. If the corporate tax rate is 40%, what would be the cost of capital?1. 6.82%2. 5.98%3. 6.18%4. 5.5%

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