Assume Preferred Stock of Ford Motors Pays a Dividend of $4

question 106

Multiple Choice

Assume preferred stock of Ford Motors pays a dividend of $4 each year and trades at a price of $35. What is the cost of preferred stock capital for Ford?

• A) 11.4%
• B) 12.6%
• C) 13.7%
• D) 14.9%

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Definitions:

Accounting Work

The activities involved in maintaining and auditing records and preparing financial reports for a business or individual.

Inventory

The total value of goods and materials held by a company for the purpose of resale or production.

Partnership Interest

An ownership share in a partnership that represents a portion of the entity's assets and income.

Depreciate

To reduce the recorded value of an asset in financial accounts over its useful life to reflect wear and tear, obsolescence, or decline in value.