Tunney Industries may issue perpetual preferred shares at $50 per share. The issue is expected to pay a constant annual dividend of $ 3.80 per share. The floating cost of the issue is estimated at 5%. What will be the cost of preferred shares (r_PS)? 

Answer rating: 100% (QA)

The cost of preferred shares rPS can be calculated using the dividend discount model DDM formula ... View the full answer