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In BPP Kit, question 201, NN co.
Cost of preference shares was 8% of .50 (the nominal value) divided by 67(the market value).
In your video lecture of WACC where the pilot paper was treated, we treated cost of preference shares as 9/76.2.
Does this mean that you actually treated it as 9% of $1, (the nominal value) divided by 762(the market value)?
If it were ordinary shares, we simply use the growth formula. Does this mean their treatment is slightly different because in ordinary shares we don’t have to find percentages. We simply use the growth formula. D0(1+g)/P0 +g
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