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Cost of Preference Share Capital -Determination (in Hindi)
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This video covers Cost of Preference Share Capital -Determination

Heena Malhotra
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Unacademy user
please mam if possible provide notes
Excellent Lecture mam....
hlo mam u r all lesson intersting but ye sari slides download nhi ho rhi ek sath
Heena Malhotra
9 months ago
Hello Naneen, sorry for inconvenience but I can't help you in this matter. You have to write a mail to unacademy team. Email id - Help@unacademy.com
Naveen saini
9 months ago
ok mam thnx for this
really mam your videos are too much helpful to understand as finacial managemet concept are not to easy to understand,but as goin through your lectures my concept cleared step by step.
Heena Malhotra
10 months ago
Thank you for appreciation Gauri ☺️☺️
  1. Cost of Capital By Heena Malhotra


  2. Cost of Capital Cost of RetainedCost and Weight Earning Cost of Combination of Cost of Equity Cost of Debt Preference Share of each sources of Capital Weighted Average Cost of Capital (WACC) By Heena Malhotra


  3. COST OF PREFERENCE SHARE CAPITAL O The preference share capital is paid dividend at a specified rate on face value of preference shares. O Payment of dividend to the preference shareholders are not mandatory but are given priority over the equity shareholder. O The payment of dividend to the preference shareholders are not charged as expenses but treated as appropriation of after tax profit. o Hence, dividend paid to preference shareholders does not reduce o the tax liability to the company. O Like the debentures, Preference share capital can be categorised as redeemable and irredeemable. By Heena Malhotra


  4. Cost of Redeemable Preference Shares Capita Cost of Preference Share Capital Cost of Iredeemable Preference Shares Capital By Heena Malhotra


  5. Cost of Irredeemable Preference Shares PD Cost of Irredeemable Preference Share (K)- Where PD Annual preference dividend Net proceeds in issue of preference shares By Heena Malhotra


  6. XYZ & Co. issues 2,000 10% preference shares of the cost of preference shares. SOLUTION 100 each at 95 each. Calculate PD (10x 2,000 10 (95x2000) - 0.1053 10.53% By Heena Malhotra


  7. PD, RV-NP) RV+NP) Cost of Reedemable Preference Share (K) - Where PDAnnual preference dividend RVRedemption value of preference shares NP Net proceeds on issue of preference shares n = Life of preference shares. By Heena Malhotra


  8. XYZ Ltd. issues 2,000 10% preference shares of 100 each at 95 each. The company proposes to redeem the preference shares at the end of 10th year from the date of issue. Calculate the cost of preference share? SOLUTION RV-NP) PD+ (RV NP) 100-95 10 10+ 0.1077 (approx) 10.77% 10095 By Heena Malhotra


  9. Cost of Capital Cost of RetainedCost and Weight Earning Cost of Combination of Cost of Equity Cost of Debt Preference Share of each sources of Capital Weighted Average Cost of Capital (WACC) By Heena Malhotra


  10. COST OF EQUITY SHARE CAPITAL o It may prima facie appear that equity capital does not carry any cost. But this is not true. The market share price is a function of return that equity shareholders expect and get. If the company does not meet their requirements, it will have an adverse effect on the market share price. o Also, it is relatively the highest cost of capital. Due to relative higher risk, equity shareholders expect higher return hence, the cost of capital is also high By Heena Malhotra