Ask Question
11 September, 17:33

Billy's Goat Coats has a preferred share issue outstanding with a current price of $38.89. The firm last paid a dividend on the issue of $3.50 per share.

What is the firm's cost of preferred equity? Round your final answer to the nearest percentage.

a) 9%

b) 10%

c) 8%

d) 7%

+5
Answers (1)
  1. 11 September, 21:03
    0
    A) 9%

    Explanation:

    Billy's cost of preferred equity is how much interest the owners of preferred stock require Billy to pay them for lending money to the company, i. e. the rate or return required by preferred stockholders.

    It is calculated by dividing the dividend paid to preferred stock by the current price of preferred stock = $3.50 / $38.89 = 9%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Billy's Goat Coats has a preferred share issue outstanding with a current price of $38.89. The firm last paid a dividend on the issue of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers