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

What is the function of dividend policy decision, Q. What is the function o...

Q. What is the function of Dividend policy decision? Dividend policy decision: the third major decision of the financial management of the decision related to the dividend poli

Types of efficiency-efficient market hypothesis , Types of Efficiency   ...

Types of Efficiency    Efficient market theory can be described in three ways: 1) Allocative Efficiency: A market is allocatively proficient when it directs savings tow

Automatic reinvestment plan, Automatic Reinvestment Plan Like in the US...

Automatic Reinvestment Plan Like in the US, UTI India has also started this plan where the amount of dividend and other income accrued on mutual fund investments is automatical

Operating cycle, how can an operating cycle be applied to a poultry busines...

how can an operating cycle be applied to a poultry business

Define when u.s. dollar weakens in foreign exchange market, What does it me...

What does it mean when the U.S. dollar weakens in the foreign exchange market? While the U.S. dollar weakens in the foreign exchange market one U.S. dollar buys smaller amount un

banking in business, a. Talk about the role of banking in business.  b....

a. Talk about the role of banking in business.  b. Set out the precise role played by Investment Banking and the challenges of corporate governance.

Which type of insurance company generally takes risks, Which type of insura...

Which type of insurance company generally takes on the greater risks: a life insurance company or a property and casualty insurance company? The risks protected against by cas

Explain the procedure for cost benefit analysis, Question 1: i) Pe...

Question 1: i) Performance budgeting is the best budgeting system. Discuss. ii) Why there is a need for implementing MTEF in the Mauritian Public Sector? Questi

Compute the rate of return on investment, Suppose you are a euro-based inve...

Suppose you are a euro-based investor who simply sold Microsoft shares which you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 each shar

How would the market price of a bond be affected, All other things held con...

All other things held constant, how would the market price of a bond be affected if coupon interest payments were made semiannually instead of annually? The majority of bonds i

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