NP incase of cost of debentures chap ( Cost of Capital )

Financial Management

Sir has taught that market price should be the first preference for irredeemable debentures but in our icai module they have given that issue price is the 1st preference. Can anybody clarify on this please?

Renganathan Subramanian

CA Inter

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31-May-21 18:11

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Answers (3)

We prefer to take market value for irreedemable and book value for reedemable

ruchi lahoti

CA Inter

★ 27K+

01-Jun-21 09:40

ruchi lahoti

We prefer to take market value for irreedemable and book value for reedemable

They have clearly said that for irredeemable debentures issue price is the 1st preference. Can anyone please clarify me whether the preference is for issue price or current market price.

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Thread Starter

Renganathan Subramanian

CA Inter

★ 0

01-Jun-21 20:20

Thread Starter

Renganathan Subramanian

They have clearly said that for irredeemable debentures issue price is the 1st preference. Can anyone please clarify me whether the preference is for issue price or current market price.

For irredeemable debentures we usually take the market price, but even issue price may be considered depending upon the details available. In case both are given in the question it is advisable to mention a note regarding the 2nd alternative used

ruchi lahoti

CA Inter

★ 27K+

02-Jun-21 11:54