Evaluation of the value of privileged shares, taking into account the possibilities of purchasing their owners by voting rights

The author considers the methodology for valuing preferred shares due to the imperfection of existing methods for their valuation, which are reflected in the professional literature. A new methodological approach to the valuation of preferred shares with regard to embedded options is proposed. It is shown that the value of the option, due to the ability of the company to manage the holders of ordinary shares, is maximum in situations of dividend payment on preferred shares and minimal in situations when dividends are not paid on them. A methodology for making decisions by controlling shareholders on the payment or non-payment of dividends on preferred shares is proposed.