- This topic has 2 replies, 2 voices, and was last updated 2 years ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › FM June 2013- Question 2
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.
I 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%.
I 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%.