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5. a) Define Redeemable preference shares. Explain the features of Preference shares. (2.5) b) Suppose an investor is considering the purchase of a 15- year,
5. a) Define Redeemable preference shares. Explain the features of Preference shares. (2.5) b) Suppose an investor is considering the purchase of a 15- year, 10 per cent tk 100 par value preference share. The redemption value of the preference share on maturity is tk 150. The investors required rate of return is 9 per cent. What should she be willing to pay for the share now?
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