Grill Works has 5 percent preferred stock outstanding that is currently selling for $50 a share....
Grill Works has 5 percent preferred stock outstanding that is currently selling for $50 a share. The market rate of return is 14 percent and the firm's tax rate is 35 percent. What is the firm's cost of preferred stock? (assume face value of the preferred stock=$100)
14.54 percent
13.67 percent
10.00 percent
14 percent
14.29 percent
Homework Answers
Firm's cost of preferred stock =Annual coupon/current price
Firm's cost of preferred stock =(5%*100)/50
Firm's cost of preferred stock =10%
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Grill Works has 5 percent preferred stock outstanding that is
currently selling for $50 a share....
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