Answered: If Salalah Energy Services is issuing…

If Salalah Energy Services is issuing preferred stock at 210 per share, with a stated dividend of 23, and a flotation cost of 10%, then what is the cost of preferred stock?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter11: Determining The Cost Of Capital

Section: Chapter Questions

Problem 3P: Cost of Preferred Stock Duggins Veterinary Supplies can issue perpetual preferred stock at a price...

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If Salalah Energy Services is issuing preferred stock at 210 per share, with a stated dividend of 23, and a
flotation cost of 10%, then what is the cost of preferred stock?
Answer: 12.6

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Cost of Preferred Stock Duggins Veterinary Supplies can issue perpetual preferred stock at a price of $50 a share with an annual dividend of $4.50 a share. Ignoring flotation costs, what is the company’s cost of preferred stock, rps?
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