A utility company’s preference shares have an annual dividend of £10, a stated par value of £100 and an effective maturity of 20 years owing to a sinking fund requirement. If similar preference share issues have current market yields of 8%,calculate what will be  the value of the utility company’s preference shares.

Answer rating: 100% (QA)

To calculate the value of the utility companys preference shares we need to use the formu... View the full answer