Estimating the cost of preference shares is more difficult to do than the cost of ordinary shares.

Question

Quizplus · Accepted Answer

The cost of preference shares can be more straightforward to calculate than the cost of ordinary shares because preference shares typically have fixed dividends, making their cost calculation more direct. Ordinary shares, however, do not have fixed dividends and their valuation can be influenced by various factors including market conditions, making their cost estimation more complex.

Estimating the Cost of Preference Shares Is More Difficult to Do