Check My Work (3 remaiming) The Cost of Capital: Cost of Preferred Stock The cost of preferred stock, ror use preferred dividend. Du, divided by the current price of the preferred stock. Pax adjustment is made when calculating r, because preferred dividends aren'tax deductible: so the ,tax savings are associated with preferred stock. d in the weighted average cost of capital equation is calculated as the itative Problem: Barton Industries can issue perpetual preferred stock at a price of 943 per Quant share. The stock would pay a constant annual dividend of s3.30 per share. If the frm's marginal tax rate is 40%, what is the company's cost of preferred stock? Roundy our answer to 2 decimal places. Check My Work (3 remaining) A-Z The Cost of Capital: Cost of Preferred Stock s Question 6 of 6 Save Submit Assignment for Grading