A company issues 10% Rs 100 debentures. The floatation cost is Rs 4. Tax rate is 30%. Debentures are redeemable after 5 years at a premium of Rs 3. The difference between the redemption value and the...

A company issues 10% Rs 100 debentures. The floatation cost is Rs 4. Tax rate is 30%. Debentures are redeemable after 5 years at a premium of Rs 3. The difference between the redemption value and the net amount realised is to be written off during the life time of the debentures. Find the cost of debt.