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John Moffat.
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arunesh77
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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
John Moffat
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They 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.
arunesh77
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