Blossom Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $28 per...

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Blossom Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $28 per...

Blossom Luxury Liners has preferred shares outstanding that pay an annual dividend equal to $28 per year. If the current price of Blossom preferred shares is $164.71, what is the after-tax cost of preferred stock for Blossom?

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Answer 1

Answer #1

Cost of preferred stock=annual dividend/current price

=(28/164.71)

which is equal to

=17%(Approx).

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Answer 2

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