2. Problem 10.02 (Cost of Preferred Stock) eBook Torch Industries can issue perpetual preferred stock at...

Question

Question

2. Problem 10.02 (Cost of Preferred Stock) eBook Torch Industries can issue perpetual preferred stock at a price of $73.00 a

Answer 1

Answer #1

Cost of preferred stock=Annual dividend/Current value

=6.5/73

which is equal to

=8.90%(Approx).

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Answer 2

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