A company is considering raising of `50 crore by issuing CPs for 90 days. CPs will be sold at a discount of 10 per cent. Stamp duty charges will be 0.5 per cent of the size of the issue. The issuing and other charges will amount to `2.50 lakh and rating charges to 0.40 per cent of the issue size. Calculate the effective cost of CP.
A company is considering raising of `50 crore by issuing CPs for 90 days. CPs will be sold at a discount of 10 per cent. Stamp duty charges will be 0.5 per cent of the size of the issue. The issuing and other charges will amount to `2.50 lakh and rating charges to 0.40 per cent of the issue size. Calculate the effective cost of CP.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A company is considering raising of `50 crore by issuing CPs for 90 days. CPs will be sold at a discount of
10 per cent. Stamp duty charges will be 0.5 per cent of the size of the issue. The issuing and other charges
will amount to `2.50 lakh and rating charges to 0.40 per cent of the issue size. Calculate the effective cost
of CP.
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