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I was listening to WACC when and when not to use lecture. i have a small doubt.
cost of prefence shares, u r using the formula with g. dividend paid to preference share is fixed, in my knowledge. so , when u used the formula with g. i got confused. for ordinary shares, it is okay to use g, growth rate of dividend.
For preference shares, g is zero. (The dividend is fixed and therefore there is zero growth).
So….the formula becomes simply Do/re
