A firm's cost of preferred stock is equal to the preferred dividend divided by the net price after flotation costs.

Name: A firm's cost of preferred stock is equal to the preferred dividend divided by the net price after flotation costs.
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Question

Quizplus · Accepted Answer

This is because the cost of preferred stock is calculated as the dividend rate divided by the net issuance price, which takes into account any flotation costs associated with issuing the preferred stock.

A Firm's Cost of Preferred Stock Is Equal to the Preferred