39.
The following information (per share) applies to a company's preferred stock: Current price | $47.00 | Par value | $50.00 | Annual dividend | $3.50 |
If the company's marginal corporate tax rate is 34 percent, the company's after-tax cost of preferred stock is closest to:
Select exactly 1 answers from the following:
A. 4.62%. B. 4.91%. C. 7.00%. D. 7.45%.答案和详解如下！
Feedback: Correct answer: D
Fundamentals of Financial Management, 8th edition, Eugene F. Brigham and Joel F. Houston (Dryden, 1998), pp. 355?56 2006 Modular Level I, Vol. III, pp. 37-38 Study Session 11-46-b calculate the component costs of 1) debt, 2) preferred stock, 3) retained earnings (three different methods), and 4) newly issued stock or external equity
No tax adjustment is made because dividends paid on preferred stock are not tax deductible: $3.50 / $47.00 = 0.0745 or 7.45%.
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发表于 2006-11-21 12:16
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