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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Sept/Dec 2021 Sec B Q2
Hi Mr Moffat,
I’m having doubt on S/D 2021 examiner’s report section B question 2.
Why do we need to deduct preference shares dividend before calculate the value of the company?
Thanks.
The P/E ratio always uses the earnings available to ordinary shareholders, which is always after subtracting any preference dividends.
Understood, thank you Mr Moffat 🙂
You are welcome 🙂