Solved

The Dividends Paid on a Preferred Stock Issue Are $4

Question 51

Multiple Choice

The dividends paid on a preferred stock issue are $4 per share, the tax rate is 40%, the price is $32 and there will be $2/share in flotation costs. Calculate the cost of the preferred stock.


A) 13.3%
B) 12.33%
C) 12%
D) 7.98%

Correct Answer:

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