Firms listed in NSE have not been able to appropriately choose the right mix of the cost of capital. This has negatively affected their financial performance, and hence there is a need to ascertain the relationship between cost of preference shares and the financial performance of manufacturing firms listed in NSE. The study was informed by the pecking order theory. The study adopted a descriptive research design. The unit of observation was companies Listed in NSE (NSE). According to NSE, there are 64 listed companies. The study purposively selected manufacturing firms that are listed at NSE. According to NSE, there are 8 manufacturing firms that are listed at NSE. The researcher collected secondary data from the audited annual financial reports of 8 manufacturing firms listed in NSE. The study used a data collection sheet to assist in data collection. Descriptive and inferential analysis was used in data analysis. The study findings revealed that cost of preference had no significant relationship with financial performance. The study concluded that only Orchard manufacturing company had mean preference shares for the 2012 to 2018 period, with other manufacturing firms recording zero preference shares for the same period. According to the findings of the study, preference shares have a little impact on the financial performance of manufacturing companies listed on the NSE. As a result, it was recommended that companies should avoid raising capital through preference shares because they had a marginally negative impact on their financial performance.