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Washerton's preferred stock pays a dividend of $0.25. The stock sells for $2.25. What is the...

Washerton's preferred stock pays a dividend of $0.25. The stock sells for $2.25. What is the cost of preferred stock for the company?

Question 11 options:

10%

14.7%

11.11%

12.1%
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Answer #1

Ans 11.11%

cost of preferred stock for the company = Dividend / Price of Stock * 100

                                                          = 0.25 / 2.25 * 100

                                                          = 11.11%

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