Question

A company issues 10,000 10% Preference Shares of Rs. 100 each redeemable after 10 years at a premium
of 5%. The cost of issue is Rs. 2 per share. Calculate the cost of preference capital.

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Answer 1

Answer:

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Answer 2

Answer:

10,50,000 is the cost of preference capital.

Explanation:

The solution is as follows:

10,000 * 5% = 500

10,000 + 500 = 10,500

Therefore, the cost will be

= 10,500 * 100

= 10,50,000

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