Residual Income & Preferred Dividend

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

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

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

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

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

Same goes for FCFE I believe

thanks all :slight_smile: