Final answer:
The cost of preference share for Zigera Company, which pays a fixed dividend of Rs. 2.00 and has a current share price of Rs. 32.00, is 6.25%.
Step-by-step explanation:
The student is asking about the cost of preference share for Zigera Company, which can be calculated using the dividend and current price of the share.
To find the cost of preference share, also known as the dividend yield, we use the formula:
Cost of Preference Share = (Fixed Dividend / Current Price of Share) x 100
For Zigera Company, the fixed dividend is Rs. 2.00 and the share is currently priced at Rs. 32.00.
Therefore, the cost of preference share would be calculated as follows:
(Rs. 2.00 / Rs. 32.00) x 100 = 6.25%
This means the cost of preference share for Zigera Company is 6.25%.
The provided PDV calculations and real-world examples are not relevant to this question, as they pertain to equity shares and profit distribution, which differ from preference shares that typically pay fixed dividends.