The cost of preferred stock is equal to the preferred stock dividend divided by the net proceeds per preferred share.

Name: The cost of preferred stock is equal to the preferred stock dividend divided by the net proceeds per preferred share.
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Question

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This statement is true. The cost of preferred stock is calculated by dividing the annual preferred dividend by the net proceeds per preferred share. This cost represents the rate of return that preferred shareholders expect to earn on their investment.

The Cost of Preferred Stock Is Equal to the Preferred