Question
Asked Feb 11, 2020
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Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $9 per share, and sells for $50. The corporate tax rate is 21%. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.)

 

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Step 1

Finance homework question answer, step 1, image 1

Step 2

The formula to compute cost of preferred stock is as follows:

 

Finance homework question answer, step 2, image 1

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