Search this course st of Capital Homework ent: Chapter 9: Cost of Capital Homework...
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Search this course st of Capital Homework ent: Chapter 9: Cost of Capital Homework Assignment Score: 62.16% Save Submit Assignment for Grading 8 3: Cost of Capital: Cost of Preferred Stock Question 20 of 20 Check My Work Cost of Capital: Cost of Preferred Stock The cost of preferred stock, used in the weighted average cost of capital equation is calculated as the preferred dividend, Des divided by the current price of the preferred stock, Pps No t ax adjustment is made when calculating Fps because preferred dividends aren't a tax deductible; sono tax savings are associated with preferred stock. Quantitative Problem: Barton Industries can issue perpetual preferred stock at a price of $60 per share. The stock would pay a constant annual dividend of $3.30 per share. If the firm's marginal tax rate is 25%, what is the company's cost of preferred stock? Round your answer to two decimal places
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