Answer:
$0,16
Explanation:
Cost of Preferred Stock. is the rate of return required by holders of a company's preferred stock. It is calculated by dividing the annual preferred dividend payment by the preferred stock's current market price
Dividend $100 x $2,50= $250
___________________________________________ = $0,16
Current market price $100 x $15= $1,500
Answer:
17.00 percent
Explanation:
Preferred equity is an ownership interest in a company. However, preferred does not carry any voting right like the common equity.
The formula for calculating the cost of preferred equity for the 100 preferred stocks is follows:
[tex]Cost of Preferred Equity = \frac{Preferred Dividend per Share * 100}{Price per Share * 100}[/tex]
Where,
Preferred Dividend Per Share = $2.50
Price Per Share = $15
Therefore,
[tex]Cost of Preferred Equity = \frac{2.50 * 100}{15} = \frac{250}{1,500} = 0.17[/tex]
Expressing 0.17 as a percentage by multiplying it by 100, we have:
Cost of Preferred Equity = 0.17 * 100 = 17.00 or 17.00 percent.
I wish best of luck.
