The cost of new preferred stock is equal to
A) the preferred stock dividend divided by its par value.
B) the preferred stock dividend divided by the market price.
C) (1 - tax rate) times the preferred stock dividend divided by net price.
D) preferred stock dividend divided by the net selling price of preferred.
D
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Consider an asset which will make a single cash flow payment of $250 in 5 years. The interest rate used to discount the cash flow is 6%, compounded annually. Holding all the other parameters constant, which of the following will increase the asset's price?
a) an increase in the cash flow to $300 b) an increase in the discount rate to 6.5% c) an increase in futurity from 5 to 6 years d) an increase in the frequency of compounding to semi-annual
OXO's toilet brushes are the top-selling toilet brushes for the past 15 years, and the market is not growing. Using the BCG Growth Matrix for SBU analysis, OXO's toilet brushes are a:
A. Star B. Question Mark C. Cash Cow D. Dog