The cost of preferred shares reflects the rate that the firm would need to offer if it issued new preferred shares today.

Name: The cost of preferred shares reflects the rate that the firm would need to offer if it issued new preferred shares today.
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The cost of preferred shares is the rate of return required by investors in the market to purchase the firm's preferred stock. It is usually determined by the current market price of existing preferred shares and not the potential issuance of new shares.

The Cost of Preferred Shares Reflects the Rate That the Firm