Rockview Limited had been facing liquidity problems for the past three years. The financial director finally decided to call for a meeting and in the meeting the Board members for Rockview Limited...

Rockview Limited had been facing liquidity problems for the past three years. The
financial director finally decided to call for a meeting and in the meeting the Board
members for Rockview Limited concluded that the company was going to issue 1
million C5 10 % debentures on 2 January 2008.
The debentures were issued at a discount of C1 per debenture and will be redeemed
on 31 December 2012 at a premium of C1.23 per debenture.
The internal rate of return is 19.992737% and the debentures were not designated at
fair value through profit and loss on initial recognition.
How much will the finance cost on the 31 Dec 2003 be…