Cost of preference shares?

Dear Student,
Here is your answer,

The cost of capital that is incurred for the preference share capital includes the dividend that needs to be paid at the end of the financial year for the shares held by preference shareholders.
​​​​​​​Formula: Kp = Dividend / NP

Kp = Dividend/Preference share capital

NP= Preference share capital – Discount – Cost of Flotation

Regards.