Homework SoursePangbourne Whitchurch has preferred stock outstanding The st
Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $6 per share, and sells for $40. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.)
References
| Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $6 per share, and sells for $40. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.) |
Solution
Stock Price = $40
Dividend per share = $6
Cost of preferred stock = annual dividend on preferred stock/Current market price of preferred stock
= 6 / 40 = 15%
