Cost of preferred stock remains constant from year to year

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Reference no: EM131576513

Which one of the following statements is correct?

a. The cost of preferred stock remains constant from year to year.

b. Preferred stock is generally the cheapest source of capital for a firm.

c. Preferred stock is valued using the SML or security market line model.

d. An increase in the market value of preferred stock will increase a firm's weighted average cost of capital.

e. The cost of preferred stock is unaffected by the issuer's tax rate.

Reference no: EM131576513

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