The Preferred Stock of Dolphin Pools Pays an Annual Dividend

question 32

Multiple Choice

The preferred stock of Dolphin Pools pays an annual dividend of $5.25 a share and sells for $48a share.The tax rate is 35 percent.What is the firm's cost of preferred stock?

• A)9.67 percent
• B)10.94 percent
• C)15.07 percent
• D)15.59 percent
• E)16.47 percent

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