Rose has preferred stock selling for 97.8 percent of par that pays a 10.2 percent annual...

Rose has preferred stock selling for 97.8 percent of par that pays a 10.2 percent annual coupon. What would be Rose's component cost of preferred stock?

10.20%
10.43%
9.98%
5.22%

Expert Solution

Cost of Preferred Stock = Annual Dividend / Stock price

Annual Dividend = 10.2%

Stock price = 97.8%

Cost of Preferred stock = 10.2/ 97.8

= 10.43%

Cost of Preferred Stock = 10.43%

ThankYou....

jeff jeffy answered 2 years ago

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