P Ltd. has 12% Debentures of ₹40 Lakh and 13% Debentures of ₹60 Lakh. If the corporate tax rate is 30%, then combined cost of debt after tax will be :

CS Executive · Corporate and Management Accounting · PYQS · December 2019
P Ltd. has 12% Debentures of ₹40 Lakh and 13% Debentures of ₹60 Lakh. If the corporate tax rate is 30%, then combined cost of debt after tax will be :
(A) 12.60%
(B) 8.75%
(C) 8.82%
(D) 12.50%

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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