Cost of Preference Capital can be obtained by
| A. | KP = E – P/2/D – E/100 (1 - Tax) |
| B. | KP = E – P/2/D + 1/100 x 100 |
| C. | KP = D + 1/2 x 100 |
| D. | KP = D + (M.V. - N.P./n)/(M.V. + N.P./2) |
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Option: D Explanation : Click on Discuss to view users comments. |
Assertion (A) : High capital gearing leads to greater speculation.
Reason (R) : Proportion of equity share capital in relation to the total capital comprising the other securities is small leading to capitalisation being highly geared.
| A. | Both A and R are true and R is the correct explanation of A |
| B. | Both A and R are true but R is not a correct explanation of A |
| C. | A is true but R is false |
| D. | A is false but R is true |
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Option: D Explanation : Click on Discuss to view users comments. |
Capital budgeting actually the process of making investment decisions in
| A. | Sales Planning |
| B. | Production process and style |
| C. | Fixed Assets |
| D. | Current Assets |
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Option: C Explanation : Click on Discuss to view users comments. |
