What is the after-tax cost of the preferred equity

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Reference no: EM132011188

1. What is the after-tax cost of the following preferred equity? The par value of the preferred share is $100 and the annual dividend is $6.00. The preferred shares have no stated maturity. The current market price of the share is $ 85. Assume that the corporate tax rate is 35%.

2. The Treasury bond rate is currently 7 % and the market return was last reported to be 13%. National Bank has a beta of 0.64. What is the cost of equity?

Reference no: EM132011188

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