Gamma Enterprises has asked you to calculate the return on its preference shares to help in its calculation of its weighted average cost of capital (WACC). Gamma has 120,000 preference shares issued at par. Preference shares were issued at a dividend rate of 6.4% p.a. of $20 face value, and the current market price is $15. What is the required return on one of Gamma's preference shares?

Answer rating: 100% (QA)

Heres how to calculate the required return on one of Gammas preference shares 1 Calc... View the full answer