Ask Question
10 November, 14:20

Ningbo Shipping has issued preferred stock at its $125 per share par value. The stock will pay a $15 annual dividend. The cost of issuing and selling the stock was $4 per share. The cost of Ningbo Shipping preferred stock is:

+5
Answers (1)
  1. 10 November, 15:12
    0
    The cost of Ningbo Shipping Preferred stock is 12.40%

    Step-by-step explanation:

    In this question, we are asked to calculate the cost of Ningbo shipping Preferred stock.

    To calculate this, we make use of the following mathematical relation;

    The cost preferred stock Kp = Annual dividends / Issued price-Cost of Issuing

    From the question, we identify the following;

    Issued price = $125

    Annual dividend = $15

    Cost of Issuing = $4

    Inserting these into the formula we have;

    Kp = $15/$125 - $4 = 12.40%

    This means that Cost of Ningbo shipping preferred stock is 12.40%
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Ningbo Shipping has issued preferred stock at its $125 per share par value. The stock will pay a $15 annual dividend. The cost of issuing ...” in 📙 Mathematics if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers