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What is the company cost of preferred stock

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Reference no: EM132921983

Question - Perpetual preferred stock from Franklin Inc. sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

a. 8.72%

b. 10.22%

c. 9.44%

d. 9.08%

e. 9.82%

Reference no: EM132921983

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