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Cost of preferred stock Taylor Systems has just issued preferred stock The stock has a 12 annual dividend and a 100 par value and was sold at 9750 per share In addition flotation costs

Cost of preferred stock Taylor Systems has just issued preferred stock. The stock has a 12% annual dividend and a $100 par value and was sold at $97.50 per share. In addition, flotation costs of $2.50 per share must be paid.
a. Calculate the cost of the preferred stock.
b. If the firm sells the preferred stock with a 10% annual dividend and nets $90.00 after flotation costs, what is its cost?

Jun 03 2021 View more View Less

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