What is the firms cost of preferred stock

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Reference no: EM131493306

Common shares of App Invent Inc. have a beta of 0.9.The market risk premium is 8 percent, and T-bills are currently yielding 1 percent. The company's most recent dividend was $1.50 per share, and dividends are expected to grow at a 3 percent annual rate indefinitely. The stock also currently sells for $30 per share.

App Invent Inc. also has an issue of preferred stock with a $6 stated dividend that just sold for $90 per share. What is the firm's cost of preferred stock?

Please show your work as best as possible including formulas.

Reference no: EM131493306

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