Your firm's preferred stock pays a dividend of $3.30 per year. The current price of the...

Your firm's preferred stock pays a dividend of $3.30 per year. The current price of the preferred stock is $21.50. Your firm's tax rate is 35%. What is your firm's cost of preferred stock?

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Expert Solution

Cost of Preferred Stock = Dividend per share / Price of Preferred stock

= $3.30 / $21.50

Cost of Preferred Stock = 0.1535 or 15.35%

jeff jeffy answered 2 years ago

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