Hi I just have a small doubt regarding cost of preference shares whether they are included in cost of equity for WACC calculation or in cost of debt.
Thank you
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WACC
8y ago#1They are not included in either.
You calculate the cost of each source of finance separately - equity, preference shares, and each source of debt - and then take the weighted average of all of them.
Do watch my free lectures on this. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
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