Cost of Preferred Stock Formula
Ad Trade on One of Three Powerful Platforms Built by Traders For Traders. Rate of dividend 3 100 003. Capital Gearing Ratio Financial Analysis Money Management Advice Finance Investing Where the dividend is expected dividend ie. . Hence k p 215 133. Current dividend plus growth if any. Lets say a companys preferred stock pays a dividend of 4 per share and its market price is 200 per share. Cost of Preferred Stock for Shares Dividend Market Price. The formula used to calculate the cost of preferred stock with growth is as follows. As the preferred stocks are currently outstanding thus we can calculate the cost of preferred stock by using the below formula. The cost of preferred stock is simple and it is calculated by dividing dividends on preference shares by the amount of preference share and expressed in percentage. Cost of Preferred Stock 400 1 20 5000 20. For example if the preferred stocks par value is
