Cost of capital doubt?

its very simple dear.......

they taken market price 80 bcoz its already mentioned in the ques....

agar tu aaj debenture sell karta hai to tu kitna realize kar payega???? .i.e 80rs

logic ye hai ki company market price se jada price prs to issue karegi nai kyouki agar co. esa karti hai to kon kharide ????? jada amt. pay karke

market me use saste me mil raha hai to vo fir market se buy karna opt. karega...

hope u got it!!!!!!!!!

brother net proceeds is the amt that company gets when issuing the deb ..

so np = issue price - issuing expense

so ismein market value ka kya role..market value is d value that d compnay will get when it sells d deb ..bt abhi to yeh co..issue kar rhi hain....

hai ther 

i came across a question wer ther was market price given in the question but NP was taken as the Par value of the debenture

" Rs 100 per debenture redeemable at par has 2% floatation cost and 10 years of maturity .

The market Price per debenture is Rs 105." ( 9% Debentures,corporate tax- 35%)

cost of Debentures = 9(1-0.35)+(100-(*100-2))

                                                                   10 yrs

                                               (100+98)/2

why did they take NP = 100? . its Practise manual question