Cost of capital

Financial Management

Why the net proceeds value is taken as market value even though the question specifically specifies that the debentures are issued at par....Is it bczz of the reason that the company wants to know the current cost of its existing debt

Shriram Ravichandran

ACCA Skill

★ 2K+

30-Aug-21 15:55

680

Answers (5)

For Redeemable debentures first preference is book value, if issue price is not given then market value is to be taken if it is given and if market value is not given then take face value as net proceeds

Miradevi S

CA Final

★ 16K+

30-Aug-21 16:19

Book value is issue price

Miradevi S

CA Final

★ 16K+

30-Aug-21 16:22

In this issue price on 1.4.17 is not given so we are taking market value

Miradevi S

CA Final

★ 16K+

30-Aug-21 16:23

Miradevi S

In this issue price on 1.4.17 is not given so we are taking market value

why are we taking the issue price on 1.4.17 rather than the original issue price on 1.4.12( Issued @ Par)

Thread Starter

Shriram Ravichandran

ACCA Skill

★ 2K+

30-Aug-21 18:33

They are asking for 1.4.17

Miradevi S

CA Final

★ 16K+

30-Aug-21 20:28