=+On 1 January 2004, VERTIGO issued 30,000,000 €1 preference shares at par, incur- ring issue costs of €300,000. The dividend payable on the preference shares was 4% per annum, payable on 31 December each year. The redemption date for the preference shares was 31 December 2008 at a price of €1.35 per share. The effective interest cost of the preference shares is 10%. The statement of financial position of VERTIGO on 30 Decem- ber 2008, the day prior to the redemption of the preferences shares, was as follows: €1 ordinary share capital Redeemable preference shares Share premium account Retained earnings Requirement €°000 300,000 40,500 77,000 182,500 600,008

(a) Calculate the finance cost in respect of the preference shares for EACH of the five years ended 31 December 2004 to 2008.

(b) Assuming the redemption occurred, prepare the capital and reserves section of the statement of financial position of the VERTIGO Group as at 31 December 2008.