Ca ipcc costing fm cost of capital

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Student CA
31 Points Posted on 24 April 2016
floatation cost is charged on issue price or face value.plz reply urgently
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On 24 April 2016 at 10:07 Report
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22 Points Posted on 24 April 2016
face value
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On 24 April 2016 at 15:22
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Student CA
31 Points Posted on 25 April 2016

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

 

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On 25 April 2016 at 10:12
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22 Points Posted on 25 April 2016
net proceeds is 90
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On 25 April 2016 at 10:42
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Guest

Posted on 25 April 2016
90.25..Flotation cost is charged on issue price .
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On 25 April 2016 at 13:30
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Student CA
31 Points Posted on 25 April 2016

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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On 25 April 2016 at 17:28

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