A company has preferred stock that pays an 8 percent dividend on a par value of $75.
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Question:
A company has preferred stock that pays an 8 percent dividend on a par value of $75. If a new issue is offered, the issue costs will be 3 percent of the current market price of $80. The company's marginal tax rate is 35 percent.
What is the cost of financing the company's preferred stock?
Related Book For
Foundations Of Finance
ISBN: 9780135160619
10th Edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty
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