Answer: Correct answer is 6.13%
Cost of the preferred stock=(Annual dividend)/(Present
value)
=(Coupon percent)*(Par value)/(Present value)
=(5.9%*100)/96.3
=0.061266874 or 6.13% (Rounded to two decimal places)
Bethesda Water has an issue of preferred stock outstanding with a coupon rate of 5 90...
Bethesda Water has an issue of preferred stock outstanding with a coupon rate of 6.20 percent that sells for $97.26 per share. If the par value is $100, what is the cost of the company's preferred stock? A) 6.37% B) 6.15% C) 6.91% D) 6.20% E) 6.11%
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