A Firm Has $3 Million Market Value and It Sells

question 101

Multiple Choice

A firm has $3 million market value and it sells preference shares at $100 per share. If the annual dividend on the preference share is $9 and it trades at $95, what is the cost of preference share capital?

• A)10.41%
• B)9.47%
• C)10.21%
• D)8.75%

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