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1alculate the cost of preference capital (k p ) for a-(Answered)


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1?alculate the cost of preference capital (kp) for a non-redeemable preference share which has the following:

Price = $15 and a Preference dividend of $1.3?paid every six months. Your answer should the effective annual cost as a?decimal accurate to?four decimal places

2?Given that?preference shares have an expected dividend stream of 20 cents in perpetuity and that the current market price (cum-dividend) of the? preference shares is $2.40, calculate the cost of?capital(kp)?of these preference shares.?my answer is 0.0833,but it is wrong)



Paper#9257348 | Written in 27-Jul-2016

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