Irredeemable Preference Share & Redeemable Preference Share

Irredeemable Preference Share

The preference share may be treated as a perpetual security if it is irredeemable. Thus, its cost is given by the following equation (for a perpetuity):

kp = DIV+RV-NP/N/RV+NP/2

where kp is the cost of preference share, DIV is the expected preference dividend, Rv is redeemable value,NP is net proceeds now and N is number of years for maturity.

Redeemable Preference Share

for details visit- http://www.mbachannel.blogspot.in/2014/05/irredeemable-preference-share.html

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