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Cost of capital :ca ipcc costing fm
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
Replies (3)
In this case, net proceeds will be 90.25.
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
So should we deduct floatation cost from ISSUE PRICE only in exams?
please reply
thanks
Check Q 22 of practice manual and solve that question for one unit and tell me. You'll get your answer. And according to that solution,it should be 90.25.
I hope this helps.
I hope this helps.
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