Holdup Bank has an issue of preferred stock with a $5.05 stated dividend that ju

Question

Holdup Bank has an issue of preferred stock with a $5.05 stated dividend that just sold for $87 per share. What is the bank’s cost of preferred stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of preferred stock_______?_______%

Holdup Bank has an issue of preferred stock with a $5.05 stated dividend that just sold for $87 per share. What is the bank’s cost of preferred stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Cost of preferred stock_______?_______%

Explanation / Answer

cost = 5.05/87=5.80%

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