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Homework answers / question archive / Torch Industries can issue perpetual preferred stock at a price of $63
Torch Industries can issue perpetual preferred stock at a price of $63.00 a share. The stock would pay a constant annual dividend of $5.50 a share. What is the company's cost of preferred stock, ro7 Round your answer to two decimal places.
Cost of preference shares=
preference dividend ÷ preferred stock price
=$5.5/$63=8.73%
cost of preferred stock=8.73%
