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Question 4 (5 points) Perpetual preferred stock from Stanley Inc. sells for $100 per share, and it pays an $5.50 annual dividend. If the company
Question 4 (5 points) Perpetual preferred stock from Stanley Inc. sells for $100 per share, and it pays an $5.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 8.00% of the price paid by investors. Which of the following is clesest to the company's cost of preferred stock for use in calculating the WACC? A) 4.27% B) 5.98% C) 5.50% D) 5.09% E) 5.86%
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