Chapter 7 Formulas preferred shares Flashcards Preview

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Flashcards in Chapter 7 Formulas preferred shares Deck (13):
0

What are dividends

They are income not capital gains

1

What happens when u sell shares

You have a capital gain or loss

2

What is the total dollar return

Income from dividends plus capital gain

3

How do you calculate the price for preferred shares

Dividends paid per share / required return

4

How do you calculate the dividends paid per share for preferred shares

Price x required rate of return

5

How do you calculate the dividend rate for preferred shares

Dividends paid per share / par value

6

How do you calculate the required return for preferred shares

Dividend per share / selling price

7

How do you calculate the par value for preferred shares

Dividends paid per share / dividend rate

8

How do you calculate the price for a preferred share

Dividends per share / required return

9

How do you calculate the risk premium for preferred shares

Price / (dividend x par) x 100

Required return - risk free rate

= risk premium

10

How do you calculate the required return on equity for preferred shares

Risk free rate + premium

11

How do you estimate the value of preferred shares

Dividend amount / required rate of return

12

How donyiubdeterminrbtgdvrequited rate of return

Dividend amount / selling price