Question

    Dexie Ltd has a preferred stock that pays a dividend of

    8 per share and the current price of stock is 100. What is the cost of preferred stock?
    A 8% Correct Answer Incorrect Answer
    B 12.5% Correct Answer Incorrect Answer
    C 10% Correct Answer Incorrect Answer
    D 8.1% Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Cost of preferred stock = dividend per share/price of stock 8/100 = 0.08~8%

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