Assuming that a firm pays tax at a 50 per cent rate,
compute the after tax cost of capital in the following
cases:
I. A 8.5 % preference share sold at par.
II. A perpetual bond sold at par, coupon rate of
interest being 7 per cent
III. A ten year, 8 percent, Rs.1000 par bond sold at
Rs.950 less 4 percent underwriting commission.
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