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Cost of Preference shares

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Cost of Preference shares

  • This topic has 2 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • February 15, 2021 at 6:06 am #610435
    chughtai20
    Participant
    • Topics: 39
    • Replies: 52
    • ☆☆

    5% pre. shares $1 nominal value. Total nominal value is $10 million. The ex-dividend market value of the preference shares is $6·25 million.
    Cost is 3 % when I calculate it like this 0.05/(10/6.25) but the answer says cost is 8 %. I don’t get it .

    February 15, 2021 at 6:19 am #610437
    chughtai20
    Participant
    • Topics: 39
    • Replies: 52
    • ☆☆

    oops ! I get it now. Silly mistake.

    February 15, 2021 at 8:03 am #610460
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    Great 🙂

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Cost of Preference shares’ is closed to new replies.

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