Ranu & Co. has issued 10% debenture of face value 100 for 10 lakh. The debenture is expected to be sold at 5% discount. It will also involve…

Ranu & Co. has issued 10% debenture of face value 100 for 10 lakh. The debenture is expected to be sold at 5% discount. It will also involve floatation costs of 10 per debenture. The debentures are redeemable at a premium of 10% after 10 years. Calculate the cost of debenture if the tax rate is 30%.