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hello sir,
From BPP revision kit question number 195
,I don’t understand how to do this it says preference share irredeemable,I understand that it is equity but i can’t figure out a way to find the ex div market value and div is not given,
can u please explain mePreference shares have a fixed dividend.
Since they are 8% preference shares, and the nominal/par value is $0.50, then dividend is 8% x $0.50 = $0.04 per year.
Therefore the ex div price is $0.30 – $0.04 = $0.26.
(Did you not look at the answer in the Revision Kit, because it shows the workings? 🙂 )
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