Question
In: Finance
Schuss Inc can sell preferred shares for $96 with in estimated flotation cost of $6.00. The...
Schuss Inc can sell preferred shares for $96 with in estimated
flotation cost of $6.00. The prefferd stock is anticipated to pay
$5 per share in divideds.
Compute the cost of preferred stock for Schuss
Inc.
Solutions
Expert Solution
Cost of preferred stock = Dividend / ( Price of Preferred stock - Floatation cost)
= 5 / (96-6)
= 5/90
= 0.05555555555
In percentage, 0.05555555555 * 100
Cost of preferred stock = 5.555%
jeff jeffy answered 2 years agoRelated Solutions
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