Question

The 7.5 percent preferred stock of rock bottom floors is selling for $84 a share. what is the firm's cost of preferred stock if the tax rate is 35 percent and the par value per share is $100?

Answer 1

8.93 percent,

A preferred stock is a class of proprietary rights in a company that has a higher assert on its assets and payments than common stock. Favor shares generally have a dividend that must be remunerate out before dividends to common shareholders.