A company can sell new preferred stock at $80 per share with an annual dividend of $7

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A company can sellnewpreferred stock at$80per share with an annual dividend of$7per share. However, the company must pay a5% flotation costof the preferred stock price in order to sell it. What is the cost of using thenewpreferred stock? The company tax rate is 30%.

A)5%

B)6.13%

C)8.31%

D)9.21%

Posted Date: May 19, 2024 07:02 PM

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A company can sell new preferred stock at $80 per share with an annual dividend of $7

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