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Understanding Cost of Preferred Stock by Sabyasachi Bosu is a document available to read on EtoBox.
1) The cost of preferred stock (Kps) is calculated as the preferred dividend (Dps) divided by the net issuing price (NP), which is the price received after deducting flotation costs. 2) The cost of retained earnings (Ks) is the rate of return stockholders require on the equity capital the firm obtains by retaining earnings. It is equal to the expected rate of return stockholders could earn elsewhere of comparable risk. 3) The cost of common stock equity (Ke) is similar to Ks but higher because there are
- Author
- Sabyasachi Bosu
- Language
- EN