DFS - Preference Capital Share and Preference dividends
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I'm looking through my notes and I've come across Pref Divi's and Pref Capital Share, but I haven't got much about them, can anyone shed some light about them please?
What I know from my notes is that Pref Divi's are at a fixed rate and must be paid before Ordinary divi's, and Pref share capital basically means that these shareholders don't get to vote; and knowing that Divis cannot be included in the income statement but only the retained earnings working, where would the pref divi's go. I ask this as in the interpretation of accounts, the Return on equity ratio involves the pref divis and the gearing ratio includes pref share capital so it looks like it must be included in the income statement and balance sheet somewhere, as follows:
ROE: Profit aftr interest and pref divis but before tax/ordinary share capital + reserves
Gearing: Long term debt (incl. pref share capital/ share capital + reserves + long term debt.
Can anyone help?
What I know from my notes is that Pref Divi's are at a fixed rate and must be paid before Ordinary divi's, and Pref share capital basically means that these shareholders don't get to vote; and knowing that Divis cannot be included in the income statement but only the retained earnings working, where would the pref divi's go. I ask this as in the interpretation of accounts, the Return on equity ratio involves the pref divis and the gearing ratio includes pref share capital so it looks like it must be included in the income statement and balance sheet somewhere, as follows:
ROE: Profit aftr interest and pref divis but before tax/ordinary share capital + reserves
Gearing: Long term debt (incl. pref share capital/ share capital + reserves + long term debt.
Can anyone help?
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Re:DFS - Preference Capital Share and Preference dividends
Also,
What's the treatment for interim and final dividends?
When is each paid, do both get deducted from retained earnings workings?
After todays BTC exam, I'm trying to cover every area I don't know
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