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.

Answer 1

Answer:

Cost of preference capital = 10,50,000

Explanation:

(10,000×5%) = 500

10,000+500 = 10,500

cost of preference capital = 10,500×100

= 10,50,000

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