Question

Torch Industries can issue perpetual preferred stock at a price of $53.50 a share. The stock would pay a constant annual dividend of $4.50 a share. What is the company's cost of preferred stock, rp

Answer 1

The company's cost of preferred stock is $0.084 or 8.4%.

What Are Stocks?

A stock usually referred to as equity, is a type of investment that denotes ownership in a portion of the issuing company. Shares, also known as units of stock, entitle their owners to a share of the company's assets and income in proportion to the number of shares they possess.

$cost of preferred stock=\frac{annual dividend }{price of stock}$

$cost of preferred stock =\frac{ 4.50}{ 53.50}$

cost of preferred stock = $0.084

cost of preferred stock = 8.4%

Hence, the company's cost of preferred stock is $0.084 or 8.4%.

To know more about the cost of preferred stock refer to: brainly.com/question/15728637

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