How to Calculate The Cost of a Newly Issued Preferred Stock

Convert the flotation cost percent to a decimal by dividing the number by 100. For example, a 5 percent flotation cost divided by 100 would be:
5/100=0.05
Subtract the decimal of the flotation cost from 1. For the example:
1 -- 0.05 = 0.95
Multiply the market price for the preferred stock by one minus the flotation cost. For the example, a market price of $100 would yield:
100x (0.95) = 95.
Divide the dividend paid by the preferred stock by this number. For the example, a dividend for the stock of $5 would result in:
5/95 = 0.053
Multiply this result by 100 to find the cost of the newly issued preferred stock as a percent. For the example:
0.053 x 100 = 5.3 percent.

How to Calculate Safety Stock

Before you can calculate your safety stock, you must determine the standard loss function. Subtract the desired fill rate from 1.
Multiply this sum by the demand, which is the amount of items that will be consumed or bought.
Multiply this sum by the time between orders. Write this sum down and set aside.
Add the time between orders (from Step 3) with the lead time. This is the time between your reorder decision and renewed availability.
Take this sum to the 1/2 power.
Multiply this sum by the standard deviation. See the Resources section below for steps to calculate the standard deviation.
Divide the sum from Step 3 by the sum from Step 6. This is the standard loss function.



Refer to a lookup table and determine what the variable 'z' for the standard loss function is.
Take the sum from Step 5 in the previous section (which is the time between orders plus the lead replenishment time taken to the 1/2 power) and multiply it by the standard deviation.
Multiply the sum with variable 'z' found in Step 1.
This sum is the safety stock.