Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $6 per share, and...
Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $6 per share, and sells for $40. The corporate tax rate is 35%. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.)
Homework Answers
Information provided:
Preferred dividend= $6
Market price of preference shares= $40
Cost of preference shares is calculated using the below formula:
= Preferred dividend/ Market price of preference shares
= $6/ $40
= 0.15*100
= 15%.
In case of any query, kindly comment on the solution.
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