The Cost of Perpetual Preferred Stock Is Found as the Preferred's

question 20

True/False

The cost of perpetual preferred stock is found as the preferred's annual dividend divided by the market price of the preferred stock.No adjustment is needed for taxes because preferred dividends, unlike interest on debt, is not deductible by the issuing firm.

---

Definitions:

Disequilibrium

In economics, a state where market supply and demand are not balanced, leading to inconsistency in prices and quantities.

Unfreezing

The initial phase in the change process where existing patterns or behaviors are challenged to facilitate transition.

Organizational Politics

Activities within an organization aimed at improving individual or group positions and interests, often at the expense of others.

Parallel Learning Structures

Are systems set up within organizations that run alongside formal operational processes to facilitate innovation and learning.