Present Value of Preference Shares15th February 2020
Preference shares give a fixed rate of dividend but without a maturity date. Preference shares are usually perpetuities but sometimes they do have maturity dates also.
The value of a preference share as a perpetuity is calculated thus:
V = D/i
V = Value of Preference Share
D = Annual Dividend per Preference Share
i = Discount Rate on Preference Shares