A company has preferred stock that can be sold for 28 per, Ask an Expert

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A company has preferred stock that can be sold for $28 per share. The preferred stock pays an annual dividend of 5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.50 per share. The company's marginal tax ate is 35%. Therefore, the cost of preferred stock is.

a. 18.87%

b. 17.86%

c. 11.61%

d. 12.26%

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Basic Finance, Finance

Category:- Basic Finance
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