Which of the following is the correct formula to calculate the cost of irredeemable preference shar...........

Principles of Accounting & Financial Management Cost of capital

Which of the following is the correct formula to calculate the cost of irredeemable preference shares?

Preference dividend ÷ Net proceeds

Preference dividend × (1 – t)

[Preference dividend × (1 -t)] ÷ Net proceeds

[Preference dividend ÷ Net pro-ceeds] × (1 – t)

Answer:
(A) Preference dividend ÷ Net proceeds

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