A redeemable preference share has face value ₹100, dividend 12%, net proceeds ₹95, redemption at par in 10 years. Approximate Kp is:

1. Kp = [PD + (RV−NP)/n] / [(RV+NP)/2]. 2. Numerator = 12 + (100−95)/10 = 12 + 0.5 = 12.5. 3. Denominator = (100+95)/2 = 97.5. Kp = 12.5/97.5 ≈ 12.6%. _Source: ICAI BoS CA Inter Paper 6A, Ch 4 "Cost of Capital", §6_