Dudley's has a preferred share issue outstanding with a current price of $26.57 per share and a par value of $25. The firm is expected to pay a dividend of $1.86 per share a year from today. What would be the cost of issuing new shares of preferred equity? (Round your final answer to the nearest percentage.)

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Dudley's has a preferred share issue outstanding with a current price of $26.57 per share and a par
value of $25. The firm is expected to pay a dividend of $1.86 per share a year from today. What
would be the cost of issuing new shares of preferred equity? (Round your final answer to the nearest
percentage.)
O 7.0%
O 6.5%
O 8%
O 7.44%
Transcribed Image Text:Dudley's has a preferred share issue outstanding with a current price of $26.57 per share and a par value of $25. The firm is expected to pay a dividend of $1.86 per share a year from today. What would be the cost of issuing new shares of preferred equity? (Round your final answer to the nearest percentage.) O 7.0% O 6.5% O 8% O 7.44%
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