A Firm Has $2 Million Market Value and It Sells

question 10

Multiple Choice

A firm has $2 million market value and it sells preference shares for $100 per share. If the annual dividend on the preference share is $8 and it trades at $90, what is the cost of preference share capital?

• A)9.35%
• B)8.75%
• C)9.21%
• D)8.89%

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Definitions:

Perceptual Illusions

Misinterpretations or distortions of real external stimuli, demonstrating how the brain organizes and interprets sensory information.

Far-Sightedness

A common vision condition, also known as hyperopia, where distant objects can be seen more clearly than near objects.

Retina

A layer of cells at the back of the eyeball containing photoreceptor cells, which convert light into electrical signals for vision.

Lens

A piece of transparent material, usually made of glass or plastic, which refracts or focuses light rays, often used in glasses, cameras, and microscopes.