Quantcast

A community for students. Sign up today!

Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing

Dadoyan

  • 3 years ago

When I want to compute beta levered should I treat preferred shares as part of debt or equity?

  • This Question is Closed
  1. business1
    • 3 years ago
    Best Response
    You've already chosen the best response.
    Medals 1

    since non-payment of dividend to preferred holders cannot force a company into bankruptcy must be treated as equity.

  2. Aswath
    • 3 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    Only if you want to treat preferred equity as equity all the way through. Actually, the best thing to do is to treat it as a third source of capital, with the preferred dividend yield as the cost.

  3. business1
    • 3 years ago
    Best Response
    You've already chosen the best response.
    Medals 1

    to calculate wacc under same logic, would it = (cost of debt x debt/capital) + (cost of common x common/capital) + (cost of preferred x preferred/capital)? if so, would you than also consider including into equation cost of convertible stock, cost of stock options, etc? thanks.

  4. Not the answer you are looking for?
    Search for more explanations.

    Search OpenStudy
    • Attachments:

Ask your own question

Ask a Question
Find more explanations on OpenStudy

Your question is ready. Sign up for free to start getting answers.

spraguer (Moderator)
5 → View Detailed Profile

is replying to Can someone tell me what button the professor is hitting...

23

  • Teamwork 19 Teammate
  • Problem Solving 19 Hero
  • You have blocked this person.
  • ✔ You're a fan Checking fan status...

Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.

This is the testimonial you wrote.
You haven't written a testimonial for Owlfred.