Question: A company has preferred stock outstanding. It issued the shares at $25 per share 5 years ago. The preferred shares pay a quarterly dividend of

A company has preferred stock outstanding. It issued the shares at $25 per share 5 years ago. The preferred shares pay a quarterly dividend of $.25 per share; assuming the company remains in business, expect dividends to be paid forever. The preferred stock traded today at $20 per share. What is the current cost of preferred stock?

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