Intro Four Seasons has preferred stock outstanding that promises to pay a quarterly dividend of $0.92...
Intro
Four Seasons has preferred stock outstanding that promises to pay a quarterly dividend of $0.92 every quarter forever. The stock currently trades for $27.5.
Part 1
What is the annual cost of preferred stock?
Homework Answers
Annual cost of preferred stock = Annual dividend / Stock price
Annual cost of preferred stock = ($0.92 × 4) / $27.5
Annual cost of preferred stock = 0.1338 or 13.38%
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Intro
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