Tangshan Mining is considering issuing preferred stock. The preferred stock would have a par value of $75, and a 5.50 percent dividend. What is the cost of preferred stock for Tangshan if flotation costs would amount to 5.5 percent of par value?
A. 5.50%.
B. 5.27%.
C. 7.73%.
D. 5.82%.
Answer:D
Tangshan Mining is considering issuing preferred stock. The preferred stock would have a par value of $75, and a 5.50 percent dividend. What is the cost of preferred stock for Tangshan if flotation costs would amount to 5.5 percent of par value?
A. 5.50%. B. 5.27%. C. 7.73%. D. 5.82%.