The preference share may be treated as a perpetual security if it is irredeemable. Thus, its cost is given by the following equation (for perpetuity):
![Image 97](https://www.vskills.in/lms/wp-content/uploads/2016/06/Image-97.jpg)
Where kp is the cost of preference share, DIV is the expected preference dividend, and Po is the issue price of preference share.