Evaluate cost of preference share capital, Financial Management

Assignment Help:

Q. Evaluate Cost of Preference Share Capital?

Cost of Preference Share Capital: - A fixed rate of dividend is to be paid on preference shares. However unlike debt the dividend is to be paid at the discretion of the Board of Directors and there is no legal binding to pay the dividend.

Preference Shares may moreover be irredeemable or redeemable after a certain period.

(i) Cost of Irredeemable Preference Share Capital: - Formula for computing cost of Irredeemable Preference Share Capital is:

KP = D/NP  X 100

K = Cost of Irredeemable Preference Share Capital P

D = Annual Preference Dividend

NP = Net Proceeds of Preference Share Capital


Related Discussions:- Evaluate cost of preference share capital

Highest earnings-per-share, McGovern Company is comparing two disimilar cap...

McGovern Company is comparing two disimilar capital structures - an all-equity plan (Plan I) and a levered plan (Plan II).  Under Plan I, the Company would have 700,000 shares of s

Budget setting styles, Advantages and disadvantage of pacipatory style of b...

Advantages and disadvantage of pacipatory style of budgeting

Treasury auction process, All treasury securities are issued on the b...

All treasury securities are issued on the basis of auction. The auction process is computerized and hence qualified broker-dealers can access it electronically. T

Finance company vital role in investment intermediaries, How is the finance...

How is the finance company play a vital role in investment intermediaries? Finance companies: Finance companies make loans to corporations and individuals by giving consu

State the analytical procedures at the planning stage, State the Analytical...

State the Analytical procedures at the planning stage Auditors must apply analytical procedures at the planning stage to help in understanding the entity's business, in identi

What do you mean by public deposits, Q. What do you mean by Public deposits...

Q. What do you mean by Public deposits? Public deposits are the fixed deposited by the business enterprises directly from the company. This source of the raising the short term

Approaches to financial management, mention the advantages and disadvantage...

mention the advantages and disadvantages of the traditional approach

Types of capital budgeting, Types of Capital Budgeting Decisions: A bu...

Types of Capital Budgeting Decisions: A business organization has to quite normal face the problem of capital investment decisions. Capital investment defines as the investmen

What is the purpose of the small business administration, 1. Discuss and de...

1. Discuss and describe in your own words the five Cs of credit analysis. 2. Why is it difficult for an entrepreneur to finance a startup with debt? What are the dangers of cre

Type of assets, type of assets for ppt from t.y.bom com student in commerce...

type of assets for ppt from t.y.bom com student in commerce department in financial management

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd