ABC corp just issued shares of preferred stock at $100 per share.The annual dividend is 5%.What...

Question

Question

ABC corp just issued shares of preferred stock at $100 per share.The annual dividend is 5%.What is the cost of preferred stock for ABC Corp?

Answer 1

Answer #1

Price of preferred Stock = Annual Dividend/Cost of preferred Stock

100 = 5/Cost

Cost = 5%

Hence, the answer is 5%

Answer 2

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