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duggins veterinary supplies can issue perpetual preferred stock at a price of $70 a share with an annual dividend of $5.60 a share. ignoring flotation costs, what is the company's cost of preferred stock, rps? round your answer to the nearest whole number.

Answer :

Cost of Preferred stock = DPS / Share price = 70/5.60= 12.5 . the rounded value will be 13.

Preferred Stock is a type of stock that resembles debt in certain ways, such as having a par value and a fixed dividend payment. Additionally, preferred investors have precedence over the company's assets in the event of a prospective liquidation, as opposed to regular stockholders. Preferred investors often do not have voting rights, in contrast to regular stockholders, who have more rights. 1 Preferred stock contains aspects of both debt and equity since it pays set dividends and has the ability to increase in value.

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