Question
A company has preferred stock with a current market price of $16.50 per share. The preferred stock pays an annual dividend of 4% based on
A company has preferred stock with a current market price of $16.50 per share. The preferred stock pays an annual dividend of 4% based on a par value of $100. The company's marginal tax rate is 40%.
Required:
What is the cost of preferred stock ??
Step by Step Solution
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Step: 1
The cost of preferred stock is the annual dividend payment divided by the net proceeds from the sale ...
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Contemporary Financial Management
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
10th Edition
978-0324289114, 0324289111
