Mathematics · Cost of Capital Calculations
A company issues 10% debentures with a face value of ₹2,500 each. The floatation costs associated with the issue are 4% of the face value. If the applicable corporate tax rate is 20%, what is the after-tax cost of debt (Kd)?
- 19.60%
- 27.85%
- 310.42%
- 48.33%✓
Correct answer
8.33%
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