Question
XYZ has preferred stock with a par value of $100 and a dividend payment of $12 per share. The price of the preferred stock is
XYZ has preferred stock with a par value of $100 and a dividend payment of $12 per share. The price of the preferred stock is $96. Tax rate is 40%. What is:
a) the before tax cost of preferred stock?
b) the after tax cost of preferred stock?
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Case Studies in Finance Managing for Corporate Value Creation
Authors: Robert F. Bruner, Kenneth Eades, Michael Schill
7th edition
007786171X, 77861711, 978-0077861711
