The cost of new preferred stock is equal to Select one:

a. (1 - tax rate) times the preferred stock dividend divided by net price.

b. preferred stock dividend divided by the net selling price of preferred.

c. the preferred stock dividend divided by the market price.

d. the preferred stock dividend divided by its par value.

Question

Business

Wrinkles

1 October, 09:53

The cost of new preferred stock is equal to Select one:

a. (1 - tax rate) times the preferred stock dividend divided by net price.

b. preferred stock dividend divided by the net selling price of preferred.

c. the preferred stock dividend divided by the market price.

d. the preferred stock dividend divided by its par value.

+2

Answers (1)

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Brett Deleon · Answer 1

c. the preferred stock dividend divided by the market price.

Explanation:

Cost of preferred stock is the rate of return required by holders of a company's preferred stock. It is calculated by dividing the annual preferred dividend payment by the preferred stock's current market price