Net proceeds market price

Financial Management

It is clearly stated that issue price is to be given first preference. If it is not given, market price should be taken, In the illustration, net proceeds is given 103, then why we have taken market price 94

Aman Mahajan

CA Final

★ 19K+

18-Sep-21 12:33

638

Answers (5)

Because the issue price is very old (5 years ago) and not relevant. If issue happened say a month or two ago then it can be considered

Sriram Somayajula

Admin

18-Sep-21 12:48

Sriram Somayajula Admin

Because the issue price is very old (5 years ago) and not relevant. If issue happened say a month or two ago then it can be considered

Here also, same reason?

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Thread Starter

Aman Mahajan

CA Final

★ 19K+

18-Sep-21 12:54

Thread Starter

Aman Mahajan

Here also, same reason?

But these are redeemable debentures and the first question was for irredeemable debentures

Sriram Somayajula

Admin

18-Sep-21 12:56

Sriram Somayajula Admin

But these are redeemable debentures and the first question was for irredeemable debentures

Yes but here issued at par 100 but market price 80 is taken. Why?

Thread Starter

Aman Mahajan

CA Final

★ 19K+

18-Sep-21 15:04

Thread Starter

Aman Mahajan

Yes but here issued at par 100 but market price 80 is taken. Why?

Because cost is computed on the most relevant price - here it is the current market price

Sriram Somayajula

Admin

19-Sep-21 11:46