Ask Question
2 March, 08:42

Torch Industries can issue perpetual preferred stock at a price of $56.00 a share. The stock would pay a constant annual dividend of $7.00 a share. What is the company's cost of preferred stock, rp

+5
Answers (1)
  1. 2 March, 09:02
    0
    Cost of preferred stock = 12.5 %

    Explanation:

    A preferred stock entitles its owner to a fixed amount of dividend. It is calculated as follows:

    Cost of preferred stock = (Preference dividend/stock price) * 100

    Cost of preferred stock = 7/56 * 100 = 12.5 %

    Cost of preferred stock = 12.5 %
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Torch Industries can issue perpetual preferred stock at a price of $56.00 a share. The stock would pay a constant annual dividend of $7.00 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers