alleryStart learning →A 10% preference share, face Rs 100, is redeemable at par in 3 years. At 12% required return, its value is?
ARs 100.00
BRs 95.20
CRs 104.80
DRs 88.00
Answer & Solution
Correct answer: B. Rs 95.20
Dividends of Rs 10 for 3 years at 12% are worth about 24.02 and the Rs 100 redemption about 71.18, totalling about Rs 95.20.
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