Cost of capital

Financial Management

Video number 5.illustration 3 In previous video it was explained that for redeemable debentures the first preference of NP = book value means issue price as it is also provided in question y market value is taken as net proceeds.

poco m2 pro

CA Inter

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29-Apr-22 14:36

457

Answers (4)

It was not given in the question, whether the debentures were issued at premium or par or discount. We do not know the issue price. But we are having the market price which must be considered here.

Yoga Vishnu

CA Final

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29-Apr-22 16:56

In first line it's given that a company issued 10000,10% debentures of â?¹10 each at PAR

Thread Starter

poco m2 pro

CA Inter

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29-Apr-22 17:45

In video 5, illustration 3 - There is no mention about issue price. So, we considered market value. In the above attachment - As it was given issued at par, consider net proceeds as Rs. 100 and solve accordingly.

Yoga Vishnu

CA Final

★ 11K+

29-Apr-22 17:52

Ok thanks

Thread Starter

poco m2 pro

CA Inter

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29-Apr-22 18:05