Holdup Bank has an issue of preferred stock with a $8 stated dividend that just sold...

Holdup Bank has an issue of preferred stock with a $8 stated dividend that just sold for $89 per share. What is the bank's cost of preferred stock?

Options:

8.00%

9.35%

9.44%

8.63%

8.99%

Expert Solution

Cost of preferred stock	Annual dividend÷Stock price

Here,
Annual dividend	$ 8
Preferred stock price	$ 89

Cost of preferred stock	8.99%
	8÷89

jeff jeffy answered 1 year ago

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