10% debentures issued to shareholders of a subsidairy company of face value 50 lakhs reedemable after 3 years. market interest is only 6% p.a
Question
10% debentures issued to shareholders of a subsidairy company of face value 50 lakhs reedemable after 3 years. market interest is only 6% p.a
Solution
The question seems to be incomplete as it does not specify what exactly needs to be calculated or answered. However, I can provide a general explanation of the terms and how they might be related.
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10% Debentures: This refers to a type of debt instrument that a company can issue to raise capital. The 10% refers to the interest rate that the company promises to pay to the debenture holders annually.
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Issued to Shareholders of a Subsidiary Company: This means that the debentures are being offered to individuals or entities that hold shares in a subsidiary (a company owned or controlled by another company) of the issuing company.
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Face Value 50 Lakhs: This is the total value of the debentures that the company is issuing. In this case, it's 50 lakhs (or 5 million in the Indian numbering system).
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Redeemable After 3 Years: This means that the debenture holders can exchange their debentures for cash after a period of 3 years.
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Market Interest is Only 6% p.a: This means that the general market interest rate is 6% per annum. This is lower than the 10% interest rate offered by the debentures, which might make the debentures a more attractive investment.
If you need a specific calculation or further explanation, please provide more details.
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