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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