2. Valuation of Shares
A company may issue two types of shares
Ordinary Share
Preference Share
Features of Preference Share and Ordinary Share
Claims
Dividends
Redemption
Conversion
3. Valuation of Preference Shares
The value of the preference share would be the sum
of the present value of the dividends and the
redemption value.
A formula similar to the valuation of bond can be
used to value