A Firm Has $3 Million Market Value and It Sells

question 36

Multiple Choice

A firm has $3 million market value and it sells preferred stock with a par value of $100.If the coupon rate on the preferred stock is 9% and the preferred stock trades at $95,what is the cost of preferred stock financing?

• A)8.75%
• B)9.47%
• C)10.21%
• D)10.41%

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