The cost of preferred stock is dependent upon:

Question

Quizplus · Accepted Answer

The cost of preferred stock is dependent upon the dividend amount and the market price of the stock. The dividend amount is fixed and stated in the preferred stock agreement, and the market price of the stock is affected by supply and demand factors. Therefore, the cost of preferred stock varies depending upon the market price of the stock, which is based on the perceived risk level and growth prospects of the firm.

The Cost of Preferred Stock Is Dependent Upon