Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently...
Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $85.00, but flotation costs will be 7% of the market price, so the net price will be $79.05 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places.
%
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Homework Answers
cost of the preferred stock=annual dividend/net price
=11/79.05
which is equal to
=13.92%(Approx).
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Travis Industries plans to issue perpetual preferred stock with
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