anonymous
  • anonymous
When I want to compute beta levered should I treat preferred shares as part of debt or equity?
Finance
  • Stacey Warren - Expert brainly.com
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katieb
  • katieb
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anonymous
  • anonymous
since non-payment of dividend to preferred holders cannot force a company into bankruptcy must be treated as equity.
anonymous
  • anonymous
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.
anonymous
  • anonymous
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.

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