Residual Income & Preferred Dividend

studymyrearoff · June 5, 2009, 5:37am

Do I need to subtract Preferred Dividend from NI in addition to Equity Charge? NI - Equity Charge - Preferred Dividend = RI ?

zizoubleu · June 5, 2009, 5:38am

I’m pretty sure you do if its there. Can anyone confirm?

kellyc319 · June 5, 2009, 5:39am

i think so too. not 100% though. bleh.

CF_AHHHHHHHHH · June 5, 2009, 5:43am

Yeah, CFAI says to take out any senior equity claims on earnings (i.e., P. Dividends)… at least i’m 95% sure.

studymyrearoff · June 5, 2009, 5:44am

i remember doing a question that has this but can’t find it out of several exams that I went through.

bpdulog · June 5, 2009, 5:44am

Same goes for FCFE I believe

studymyrearoff · June 5, 2009, 6:06am

thanks all