UGC NET Cost of capital Previous Year Questions
JRFSmart holds 16 previous-year questions on Cost of capital from UGC NET Commerce (Paper 2), filed under Unit 4: Business Finance, drawn from 15 of the 22 exam papers in the bank (2018–2025). Each question can be practised with a full explanation and shows how often NTA has returned to the same idea.
What is asked in Cost of capital
The questions in this topic fall under these subtopics, ordered by how many previous-year questions each has.
| Subtopic | Questions |
|---|---|
| Cost of preference shares | 2 |
| After-tax cost of a perpetual bond | 1 |
| Cost of equity and debt | 1 |
| Implicit cost of capital | 1 |
| Dividend growth model | 1 |
| Cost of preference capital | 1 |
| Cost of debentures | 1 |
| Weighted average cost of capital | 1 |
| After-tax cost of perpetual debt | 1 |
| Cost of equity with flotation cost | 1 |
| CAPM cost of equity | 1 |
| Cost of equity - dividend growth model | 1 |
NTA repeat analysis
Cost of capital appears in 15 of 22 papers (68%), which JRFSmart rates as high frequency.
1 question in this topic has been verified as repeated in more than one paper.
Sample previous-year questions
The current market price of a company's share is Rs. 90 and the expected dividend per share next year is Rs. 4.50. If the dividends are expected to grow at a constant rate of 8%, the shareholders required rate of return is:
Beta Company Ltd issued 10% perpetual debt of Rs.1,00,000. The company's tax rate is 50%. Determine the cost of capital (before tax as well as after tax) assuming the debt is issued at 10 percent premium.
ABC ltd. issued 2,000, 10% preference shares of Rs.100 each at Rs.95. Calculate the cost of preference shares.
Assertion (A) : New Issue of Capital is costlier than Retained Earnings. Reason (R) : The cost of Retained Earnings is the return foregone by the shareholders on the dividend income.
Compute the after-tax cost of capital of a company in case a perpetual bond (face value is ₹100) is sold as well as redeemed at par, having coupon rate of interest being 7%, and corporate tax rate is 30%.
What is value of cost of equity if risk-free rate is 6 percent, market risk premium is 9 percent and beta is 1.54?
The risk-free rate is 6 per cent, the market risk premium is 9 per cent and the beta of share is 1.54, then what is cost of equity?
Dell Ltd. has Rs. 100 preference shares redeemable at a premium of 10% with 15 years maturity. The coupon rate is 12%, the flotation cost is 5% and the sale price is Rs. 95. Calculate the cost of preference shares and select the correct option.
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