Can you kindly which formula was used to calculate the cost of equity: preference. I used
the formula as per the study notes but its not giving the same answer.
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FM June 2013- Question 2
5y ago#1I do not know which study notes and which formula you are referring to.
It is the dividend growth model formula as rearranged (as I explain in my free lectures).
The dividend is 4c per share, the ex-div market value is 40c per share, and the growth rate is zero. Therefore the cost = 4/40 = 10%.
5y ago#2I do not know which study notes and which formula you are referring to.
It is the dividend growth model formula as rearranged (as I explain in my free lectures).
The dividend is 4c per share, the ex-div market value is 40c per share, and the growth rate is zero. Therefore the cost = 4/40 = 10%.
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