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In this tutorial, the focus is on calculating the cost of redeemable debentures or debt. The cost of redeemable debt (Kd) can be determined using the formula: Kd = (Interest × (1 - Tax Rate)) + Rp - Ip / Life of the Debenture. Here, Rp stands for the redemption price, and Ip is the net issue price. The average of Rp and Ip is also considered. The example provided involves a company that issued ₹1 lakh in debentures of ₹100 each at a 5% discount, redeemable after 5 years at a 5% premium. This practical application helps illustrate the calculation of the cost of redeemable debentures effectively.