9% preference shares are redeemable at a premium of 5% in 10 years time. Dividends for the current year have been paid and the preference shares in the similar risk class are currently yielding at 12% per annum. Calculate the cost of the preference shares.
The Formula is
Kp= D1/Po
The D1 is the 9%
How do i get the Po??
ACCA Forums
FMcost of preference shares for WACC calculation formula
10y ago#1This is not in the syllabus for Paper F2 - it is Paper F9.
In addition, if they are redeemable then you would need to calculate the IRR.
You can find free lectures in the Paper F9 section.
Thank you so much.
10y ago#3You are welcome :-)
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