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

Explain the three kind’s non-financial incentives, Q. Explain the three kin...

Q. Explain the three kind’s non-financial incentives? Non-Financial incentives: Incentives which cannot be offered in terms of money are known as non-¬financial incentives. Ind

Define which proposed capital budgeting projects to accept, For a specified...

For a specified IOS and MCC, how do financial managers decide that which proposed capital budgeting projects to accept, and which to reject? For a specified IOS and MCC, all inde

Income statement & balance sheet, in 2002, jackson incorporated had gross s...

in 2002, jackson incorporated had gross sales of $4269200. for 2002, management estimated that returns and allowances would be 5 percent of gross sales. what did jackson report as

Define accumulated depreciation, What is accumulated depreciation? Depr...

What is accumulated depreciation? Depreciation is the allocation of an initial cost over time of asset. Whereas the term accumulated depreciation is the total of all the deprec

Kim, Blossom Lawn expects to have total sales next year totaling $15,000,00...

Blossom Lawn expects to have total sales next year totaling $15,000,000 and the firm pays taxes at 35% and will owe $300,000 in interest expenses.

Ratchet bonds, The coupon rate of these types of bonds is adjusted pe...

The coupon rate of these types of bonds is adjusted periodically at a fixed margin over a reference rate. It can be adjusted southward only and once it is adjuste

Estimation of working capital, Q. Estimation of Working Capital? A firm...

Q. Estimation of Working Capital? A firm must estimate in advance as to how much net working capital will be required for the smooth operations of the business. Only then, it c

Strong form level of efficiency, Strong form level of Efficiency This l...

Strong form level of Efficiency This level states that price reflects all the available public and private information (past, present and future information). If the hypothesis

Source documents of an accounting system, Source documents of an accounting...

Source documents of an accounting system: Source documents are those documents that identify the particular transaction that is being recorded.  They act as an internal control

Introduction of financial management, Introduction of Financial Management ...

Introduction of Financial Management Accounting has evolved and emerged within response to the social and economic needs of the society. The procedure of book keeping (mainten

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