A company's preferred stock pays an annual dividend of 7 euros per share. When issued, the shares sold for their par value of 100 euros per share. What is the cost of preferred stock if the current price is 120 euros per share? 5.3% 5.8% 8.1% 9.6% None of the above
A company's preferred stock pays an annual dividend of 7 euros per share. When issued, the shares sold for their par value of 100 euros per share. What is the cost of preferred stock if the current price is 120 euros per share? 5.3% 5.8% 8.1% 9.6% None of the above
Chapter11: The Cost Of Capital
Section: Chapter Questions
Problem 3PROB
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Question
A company's preferred stock pays an annual dividend of 7 euros per share. When issued, the shares sold for their par value of 100 euros per share. What is the cost of preferred stock if the current price is 120 euros per share?
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5.3%
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5.8%
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8.1%
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9.6%
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None of the above.
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