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  2. Topic
    Business
  3. Study Set
    Foundations of Finance
  4. Exam
    Exam 9: The Cost of Capital
  5. Question
    The Required Return of a Preferred Stockholder,r<sub>ps,</sub>is Higher Than the Cost
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The Required Return of a Preferred Stockholder,rps,is Higher Than the Cost

Question 113

Question 113

True/False

The required return of a preferred stockholder,rps,is higher than the cost of preferred stock for the corporation because stockholder's must pay federal taxes on their dividend income.

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