A company issued 20,000 9% preference shares of ₹100 each at 5% discount. Floatation cost amounted 2% of the face value of shares. These are redeemable after 7 years at par. Applicable income tax rate is 30%. Cost of pre
CS Executive · Financial and Strategic Management · PYQS · December 2022
A company issued 20,000 9% preference shares of ₹100 each at 5% discount. Floatation cost amounted 2% of the face value of shares. These are redeemable after 7 years at par. Applicable income tax rate is 30%. Cost of preference shares is: (A) 10.36% (B) 9.56% (C) 9.97% (D) 10.3%
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Financial Management
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