Task: What is the Cost of Borrowing Capital? Explain the different phases of Debenture issuing cost for the folliwng examples?
Question 1) A company wishes to issue 1000, 7% debentures of $100 each for which the company had to pay the following expenses:
(i) under writing commission 1.5%
(ii) Brokerage .50%
(iii) Printing & other expenses $1000.
Question 2) 7% debentures, issued at $94 after 12 years, repayment and other expenses and details as listed above in example 1.