General Studies · Cost of Capital
An investment bank is pricing a 5-year preference share issue for a utility company. The preference shares have a par value of 100 and a dividend rate of 12 percent, but they are currently trading in the market at 110. If the flotation costs are 5 percent of the market price, what is the cost of these preference shares to the company?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 111.25 percent
- 212.00 percent
- 311.48 percent✓
- 410.91 percent
Correct answer
11.48 percent
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for General Studies?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Cost of Capital MCQs →Want more practice questions on Cost of Capital?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in General Studies · Cost of Capital