Question
A companys perpetual preferred stock currently sells for $115.00 per share, and it pays an $8.00 annual dividend. If the company were to sell a
A companys perpetual preferred stock currently sells for $115.00 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock?
| a. | 6.00% | |
| b. | 7.18% | |
| c. | 5.93% | |
| d. | 7.32% | |
| e. | 6.08% |
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Fundamentals Of Corporate Finance
Authors: David W Blackwell, Robert Parrino, David S Kidwell
1st Edition
0471270563, 9780471270560
