Marme, Inc. has preferred stock selling for 95 percent of par that pays an annual coupon...

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Marme, Inc. has preferred stock selling for 95 percent of par that pays an annual coupon...

Marme, Inc. has preferred stock selling for 95 percent of par that pays an annual coupon of 11 percent.
What would be Marme’s component cost of preferred stock? (Round your answer to 2 decimal places.)

Cost of Preferred Stock: ____.__%

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Answer 1

Answer #1

Cost of Preferred Stock = Annual Dividend/Price

Cost of Preferred Stock = 11/[100(0.95)]

Cost of Preferred Stock = 11.58%

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Answer 2

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Marme, Inc. has preferred stock selling for 95 percent of par that pays an annual coupon...

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Marme, Inc. has preferred stock selling for 95 percent of par that pays an annual coupon...

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