Question

The costliest of long-term sources of finance is

Answer 1

Preference Share is the  Costliest Long - term Source of Finance.

Answer 2

The costliest long term source of finance is Preference share capital or preferred stock capital.  It is the source of the finance.

When it is compared to other source of long term sources. The major reason being a costliest source of long term debt is interest paid on preference share is not admissible for tax deduction whereas for other long term debt such as debentures amount paid as interest is admissible for tax deduction.