Cost of Preferred Stock Duggins Veterinary Supplies can issue perpetual preferred stock at a price of $50

Question:

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

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...