Mavis Taylor Corporation has just issued preferred stock. The stock has a 6% annual dividend and a $100 par
value and was sold at $98.5 per share. Flotation costs were an additional $3 per share.
a. Calculate the cost of the preferred stock.
b. If the firm sells the preferred stock with a 10% annual dividend and net $93.00 after flotation costs, what is its
cost?
Comments
Leave a comment