How Do You Calculate Redemption Value?


The redemption value is stated as a percentage of face value. For example, a $1000 bond redeemable at 105 is redeemed at 105% of $1000 = $1050. Bonds can be freely bought and sold.



How do you calculate loss on issue of debentures Class 12?

(Allotment of 1,000, 12% debentures of ` 100 each issued at a discount of 5% and redeemable at a premium of 10% after 5 years as per Board's resolution dated…) This total loss of ` 15,000 has to be written off over a period of 5 years. Therefore, every year 1/5 of Rs. 15,000 = Rs.


How is loss on redemption of debentures calculated?

at 6% premium in instalments as follows: Year I — 1,000; Year II — 2,000; Year III — 3,000; Year IV — 2,000; Year V — Balance. Show the Loss on Issue of Debentures Account till it is completely written off. Solution: Amount of Loss to be written off = ` 10,00,000 × 12/100 = ` 1,20,000.


How do you calculate redemption value?

The redemption value is stated as a percentage of face value. For example, a $1000 bond redeemable at 105 is redeemed at 105% of $1000 = $1050. Bonds can be freely bought and sold.


How do you calculate debenture cost?

If you want to know your pre-tax cost of debt, you use the above method and the following formula cost of debt formula:

  1. Total interest / total debt = cost of debt.
  2. Effective interest rate * (1 – tax rate)
  3. Total interest / total debt = cost of debt.
  4. Effective interest rate * (1 – tax rate)


What is meant by premium on redemption of debentures?

When the debentures are redeemed at a price more than its face value or the par value, then it is said that the debentures are redeemed at premium. The difference between the redeemed price and the par value is regarded as a capital loss and this loss is written off till the redemption of the debentures.


What is redemption in accounting?

Key Takeaways. In finance, redemption describes the repayment of a fixed-income security—such as a Treasury note, certificate of deposit, or bond—on or before its maturity date. Mutual fund investors can request redemptions for all or part of their shares from their fund manager.


What is the redemption value?

Redemption value is the price paid to the investor when the issuing company repurchases the security either before or at the maturity date. When called bonds are redeemed, they are redeemed at a price above par value.


What is redemption with example?

Redemption is defined as the act of correcting a past wrong. An example of redemption is someone working hard for new clients to improve his reputation. noun. 6. Salvation from sin.


What is meant by redemption of debentures by purchase in open market?

Redemption of debentures by purchase in open market refers to the condition when a company is authorised by its Article of Association to be able to purchase its own debentures.


What are methods of redemption?

Methods of Redemption of Debentures

  • Lump-sum payment on a prefixed date. This one-time method is considered to be among the simplest redeeming options.
  • Payment in annual instalment.
  • Debenture redemption reserve.
  • Call and put option.
  • Conversion into shares.
  • Buy from the open market.


What are the four components of education?

Four core components are integrated to shape the proposed concept of Education 4.0: (i) Competencies, (ii) Learning Methods, (iii) Information and Communication Technologies, and (iv) Infrastructure.


What is coconut toddy?

The traditional toddy is made from coconut palm sap which is left overnight to ferment. It is a sweet sour drink with low alcohol content.


What is 10th class called in India?

The Secondary School Certificate, also called SSC or Matriculation examination, in madrasah education Dakhil is a public examination in India, Bangladesh and Pakistan conducted by educational boards for the successful completion of the secondary education exam in these countries.


What are the examples of active components?

Common examples of active components include:

  • Voltage sources.
  • Current sources.
  • Generators (such as alternators and DC generators)
  • All different types of transistors (such as bipolar junction transistors, MOSFETS, FETs, and JFET)
  • Diodes (such as Zener diodes, photodiodes, Schottky diodes, and LEDs)


In what way synchronous motor is different from other motors?

The power factor of a synchronous motor can be adjusted to lagging, unity or leading by varying the excitation, whereas, an induction motor always runs at lagging power factor. Synchronous motors are generally more efficient than induction motors. Synchronous motors are costlier.


What are the three properties of fluids?

There are three physical properties of fluids that are particularly important: density, viscosity, and surface tension.


What is ripple factor in rectifiers?

Ripple factor is defined as. The ratio of RMS value of an alternating current component in the rectified output to the average value of rectified output. The ripple factor is denoted as γ. It is a dimensionless quantity and always has a value less than unity.


Does AI need ML coding?

Yes, if you're looking to pursue a career in artificial intelligence and machine learning, a little coding is necessary.


What is international organization 12th?

N/A

  • Economic and Social Council.
  • International Court of Justice.
  • International Atomic Energy Agency.
  • Security Council.
  • UN High Commission for Refugees.
  • World Trade Organisation.
  • International Monetary Fund.
  • General Assembly.


What are the main objectives of macroeconomics?

The overarching goals of macroeconomics are to maximize the standard of living and achieve stable economic growth. The goals are supported by objectives such as minimizing unemployment, increasing productivity, controlling inflation, and more.


Dated : 19-May-2022

Category : Education

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