The Cost of Preferred Stock Is Based on The

question 42

Multiple Choice

The cost of preferred stock is based on the:

• A) Average yield-to-maturity of the outstanding securities.
• B) After tax average coupon rate.
• C) Annual stated dividend multiplied by (1 - T_c).
• D) Perpetuity rate of return on the security.
• E) Stated dividend adjusted for any flotation costs.

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