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A company's $100, 8% preferred is currently selling for $85. What is the company's cost of preferred equity?
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A company's $100, 8% preferred is currently selling for $85. What is the company's cost of preferred equity?

User Exegesis
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6 votes

Answer:

9.4%

Step-by-step explanation:

Kps = Dps/Pps x Dps = $100 x 8% = $8, Kps = 8/85 = 9.4%

User Felixthehat
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