1. Company issued 10% debentures of Rs 500,000 at par. Compute cost of debenture if applicable tax rate is 50% and 45%.
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Answer:
Cost of Debt Formula
Total interest / total debt = cost of debt.
Effective interest rate * (1 – tax rate)
Total interest / total debt = cost of debt.
Effective interest rate * (1 – tax rate)
Explanation:
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