P Ltd. issues 40,000, 7½% Preference shares if $100 each redeemable after 6 years at a premium of 5% and its cost of issue is $2.50 per share Assuming 10% dividend tax, calculate the cost of preference capital. Select one
P Ltd. issues 40,000, 7½% Preference shares if $100 each redeemable after 6 years at a premium of 5% and its cost of issue is $2.50 per share Assuming 10% dividend tax, calculate the cost of preference capital. Select one
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 11PROB
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Question
100%
P Ltd. issues 40,000, 7½%
Select one:
a) 8.03%
b) 7.29%
c) 9.38%
d) 9.71%
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