CTL Corporation has 30% of its financing in preferred shares. The shares are currently trading at...

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CTL Corporation has 30% of its financing in preferred shares. The shares are currently trading at a maket price of $55. The book value of the shares is $60, and they pay a dividend of $4.05. CTL's corporate tax rate is 35%. What is the cost of preferred stock to the company? CTL Corporation has 30% of its financing in preferred shares. The shares are currently trading at a maket price of $55. The book value of the shares is $60, and they pay a dividend of $4.05. CTL's corporate tax rate is 35%. What is the cost of preferred stock to the company?

Answer rating: 100% (QA)

We can calculate the cost of preferred stock to CTL Corporation using two approaches Approach 1 Mark... View the full answer