COST OF PREFERENCE SHARE ASSIGNMENT HELP

Posted on March 16, 2017

BEST COST OF PREFERENCE SHARE ASSIGNMENT HELP SERVICE ONLINE

 

Here’s an excellent solution regarding cost of preference shares. Best cost of preference shares assignment help service is providing you outstanding assistance in understanding cost of preference shares. Best cost of preference share assignment help service is laying out the basic meaning of the topic.
Cost of preference share capital is that part of cost of capital in which we calculate the amount which is payable to preference shareholders in the form of dividends with fixed rate. Even, dividend to preference shareholder is on the desire of board of directors of a company and they can’t pressurize for paying dividends but this doesn’t mean calculation of preference share capital is not important because if we don’t pay the dividend to pref. shareholders it will affect on capability to receive funds from this source.

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Cost of preference share capital is calculated by the following formula

 

  • Cost of pref. share capital(Kp)= amount of preference dividend/preference share capital
  • Kp= D/P

in case we have obtained pref. share capital after some adjustments like premium or discount or pay some cost of floatation at that time, it is our duty to deduct discount and cost of floatation or add premium in par value of pref. share capital. Then the formula will change to

  • kp = D/NP

whereas, D= annual pref. dividend

  • NP = Net proceed= Par value of pref. share capital – discount – cost of floatation
    Or NP= Pervalue of pref. share capital + Premium

There is no adjustment of tax rates because, dividend on pref. share capital is payable on net profit after tax adjustment, so need not do adjustment of tax for comparing it with cost of debt or cost of equity share capital.
Students do face problems in understanding the formula but experts in best cost of pref. Share capital assignment help service is providing you the guidance to have a clear knowledge on the topic. The formula keeps changing relating to the situation which why there is possibility of confusions in a students mind.

  • At the time of maturity, we need to calculate cost of pref. share capital with following formula:

Cost of redeemable pref. share capital=
D +(M.V-N.P.)
n
_____________
½ (M.V.+N.P.)
D= annual dividend
MV=maturity value of perf. Shares
NP= net proceeds of pref. shares
N= number of years
This formula is little different from cost of non-redeemable pref. share capital because we have to add the benefit which we have given to pref. share capital at the time of maturity.

Best cost of pref. share capital assignment help service is not only theoretically, but mathematically explaining you its computation.

Suppose you have to pay Rs.10,00,000 but at the time of issue of pref. share, you had paid Rs.2 per issue of pref. shares. So, net proceed is Rs.9,80,000 but if this amount is payable after 10 years at 10% premium, this will also benefit to pref. shares capital and total cost of share capital will increase. Rate of dividend is 10%.
Cost of pref. share capital= D+(MV- NP)/n / ½ (MV+NP) X 100
=100,000 +(10,50,000- 9,80,000)/ 1/2(10,50,000+9,80,000) X 100
=100,000+7000/10,15,000 x 100
=10.54%

This is just a specimen if you ask help from best cost of pref. share capital assignment help service then our experts will give you a complete guidance over the topic. We 100% meet your deadline requirements without any plagiarism in work.

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