Compute the cost of preferred equity assuming the dividend paid for preferred stock is $2.93 and the

Question:

Compute the cost of preferred equity assuming the dividend paid for preferred stock is $2.93 and the current value of the stock is $50 per share.

a. What is the cost of preferred equity?

b. Is there any other method to compute this cost? Explain.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...