What is the cost of a preferred stock with a $100 par value that pays a $9.60

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What is the cost of a preferred stock with a $100 par value that pays a $9.60 dividend per year? The security has a flotation cost of $3.37 and will be retired at its par value in 20 years
9.6%
5.9%
9.9%
10.6%
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Financial Management Principles and Applications

ISBN: 978-0133423822

12th edition

Authors: Sheridan Titman, Arthur Keown, John Martin

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