Question
Jensen's Travel Agency has 11 percent preferred stock outstanding that is currently selling for $38 a share. The market rate of return is 15 percent
Jensen's Travel Agency has 11 percent preferred stock outstanding that is currently selling for $38 a share. The market rate of return is 15 percent and the firm's tax rate is 34 percent. What is Jensen's cost of preferred stock?
| A. | 28.95 percent |
| B. | 9.84 percent |
| C. | 39.47 percent |
| D. | 9.47 percent |
| E. | 7.26 percent |
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Risk Management And Financial Institution
Authors: John C. Hull
2nd Edition
0136102956, 9780136102953
