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Ca ipcc costing fm cost of capital
floatation cost is charged on issue price or face value.plz reply urgently
Replies (5)
face value
Please consider the following example-
a company issued. FV Rs100 share at Discount-5% and floatation cost-5%.What will be the Net proceeds from issue
100-(5%+5%)=90 or
100-5%-5%=90.25
Please reply
thanks
net proceeds is 90
90.25..Flotation cost is charged on issue price .
I was also having same answer earlier but suggested answers of Nov 2015 Q1(d) have done 1000-(5%+2%)=970
therefore a bit confused
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