Of the components shown below, which is least likely to be of value in calculating the cost of preferred stock?
A) flotation costs per share
B) book value of a preferred share
C) dividends per share
D) market price per share

Question

Quizplus · Accepted Answer

The book value of preferred stock is not relevant in calculating the cost of preferred stock since it represents historical accounting values and does not reflect current market conditions or investor expectations. The other components, such as dividends per share, flotation costs per share, and market price per share, are all important in determining the cost of preferred stock.

Of the Components Shown Below, Which Is Least Likely to Be