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Umnica [9.8K]
3 years ago
13

DEF Corporation had two issues of ordinary preferred stock with a $100 par value traded on the NYSE. One issue paid $5.56 annual

ly per share and sold for $95.55 per share. The other paid $5.88 per share annually and sold for $97.50 per share. What is DEF’s Corporation’s cost of preferred stock?
Business
1 answer:
asambeis [7]3 years ago
6 0

Answer:

5.93%

Explanation:

Cumulative Dividend for both (5.56+5.88)          $11.44

share price for both types of preferred stock (95.55+97.5) $193.05

Cost of preferred stocks $11.44/193.05=5.93%

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