Solved

A Firm Is Paying an Annual Dividend of $2

Question 38

Multiple Choice

A firm is paying an annual dividend of $2.65 for its preferred stock that is selling for $57.00. There is a selling cost of $3.30. What is the after-tax cost of preferred stock if the firm's tax rate is 33%?


A) 3.30%
B) 4.93%
C) 5.79%
D) 6.11%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q10: The cost of equity capital in the

Q21: Within the capital asset pricing model<br>A) the

Q33: The out-of-pocket cost of common stock is

Q41: The cost of debt, preferred stock, and

Q61: The use of the weighted average cost

Q78: In determining the cost of debt, a

Q83: There may be a change in the

Q97: Companies prefer to maintain some financing flexibility

Q98: The after-tax cost of preferred stock to

Q101: Using the constant dividend growth model for