Please do not give solution in image format thanku QUESTION 15ABC will issue preferred stock for $47 per share. What is the cost of preformed it it pays an annual dividend of $5 and if theflotation cost is $4.50 per share?ABC's weighted average cost of capital (WACC) is

Preferred Stock = $47 per share Annual Dividend = $5 Flotation cost = $4.50 per share

QUESTION 15 ABC will issue preferred stock for $47 per share. What is the cost of prefemed it it pays an annual dividend of $5 and if the flotation cost is $4.50 per share? ABC's weighted average cost of capital (WACC) is

QUESTION 15 ABC will issue preferred stock for $47 per share. What is the cost of prefemed it it pays an annual dividend of $5 and if the flotation cost is $4.50 per share? ABC's weighted average cost of capital (WACC) is

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 21MC

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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

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Question content area top Part 1 (Preferred stock valuation) What is the value of a preferred stock where the dividend rate is 15 percent on a $100 par value, and the market's required yield on similar shares is 13 percent? Question content area bottom Part 1 The value of the preferred stock is $enter your response here per share. (Round to the nearest cent.)