Question

A 15- of a firm can be net price of Rs.950. The rate of interest is 15 per cent per year and the will be redeemed 25% premium maturity. The firm's tax rate is 40%Compute the after- cost of debenture . Which one out of equity , preference share and debt riskiest from the investor's angle ? Justify you answer​

Answer 1

Explanation:

Prepare a cash book with cash and bank columns from the following transactions. (PQ)

01-01-2015 Cash in hand 5300

01-01-2015 Bank Overdraft (Cr) 3600

04-01-2015 Purchased goods for cash 2750

06-04-2015 Cash sales 13500

07-04-2015 Cash deposited into bank 15000

08-04-2015 Received a cheque from Mr Murali 7000

12-04-2015 Cheque received from Murali paid into bank 7000

15-04-2015 Withdrew cash from bank 5000

18-04-2015 Paid to Chithra by cheque 3000

20-04-2015 Paid salary 2500

24-04-2015 Rahul a customer directly paid into bank 800