The Cost of Preferred Stock

question 9

Multiple Choice

The cost of preferred stock

• A)increases as the beta of the firm increases.
• B)is equal to the annual dividend divided by the par value of the stock.
• C)is equal to the annual dividend divided by the present value of all the future dividend payments.
• D)varies as tax rates vary.
• E)is generally computed using the CAPM.

---

Definitions:

Kohlberg

Theory of moral development stages proposed by psychologist Lawrence Kohlberg, emphasizing the progression of moral reasoning.

Right and Wrong

Fundamental ethical concepts that define what is morally acceptable and unacceptable behavior.

Local Marathon

A local marathon is a long-distance running event, usually measuring 26.2 miles, that is organized within a specific community or geographical area.

Ethics Test

A method or evaluation to determine the moral principles governing a person's behavior or the conducting of an activity.