Answer:
1) 7.98%
Step-by-step explanation:
The solution to the company’s annual cost of preferred stock financing is shown below:-
The Annual cost of preferred stock financing = Preferred stock par value × Dividend rate per year ÷ Market value
= $15 million × (0.075) ÷ $14.1 million
= 7.98%
Therefore for computing the Annual cost of preferred stock financing we simply applied the above formula.