Question
1. A firms preferred stock currently sells for $100 per share and pays a dividend of $10 per share. However, the firm will only receive
1. A firms preferred stock currently sells for $100 per share and pays a dividend of $10 per share. However, the firm will only receive $95 per share from the sale of new preferred stock due to the floatation costs. Whats the firms component cost of Preferred stock? (Please show calculations).
A. 10.9
B. 10.5
C. 11.1
D. 11.8
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The Handbook Of Credit Portfolio Management
Authors: Greg Gregoriou, Christian Hoppe
1st Edition
0071598340, 978-0071598347
