Sixth fourth bank has an issue of preferred stock with a $6.10 stated dividend that just sold for $123 per share. what is the bank's cost of preferred stock? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,

e. g., 32.16.) cost of preferred stock %

Question

Business

Turtle

24 July, 08:28

Sixth fourth bank has an issue of preferred stock with a $6.10 stated dividend that just sold for $123 per share. what is the bank's cost of preferred stock? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,

e. g., 32.16.) cost of preferred stock %

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Answers (1)

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Ivy Oneal · Answer 1

A preferred stock is a class of possession in a company that has a developed claim on its properties and incomes than common stock.

The formula would be:

RE = D1 / P1

RE = 6.10 / 123

RE = 0.0496

Multiply this to 100%

Bank's cost of preferred stock is 4.96%