XYZ Corporation Is Trying to Determine the Appropriate Cost of Preference

question 64

Multiple Choice

XYZ Corporation is trying to determine the appropriate cost of preference shares to use in determining the firm's cost of capital.This firm's preference shares are currently selling for $29.89 per shares and pay a perpetual annual dividend of $2.60 per share.Compute the cost of preference shares for XYZ.

• A)7.2%
• B)6.2%
• C)8.7%
• D)16.7%

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