Preferred stock of Ford Motors pays a dividend of $3.5 each year and trades at a price of $25.What is the cost of preferred stock capital for Ford?

Name: Preferred stock of Ford Motors pays a dividend of $3.5 each year and trades at a price of $25.What is the cost of preferred stock capital for Ford?
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Question

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The cost of preferred stock capital is calculated as follows: 
Cost of Preferred Stock = Dividend / Price 
Cost of Preferred Stock = $3.5 / $25 = 0.14 or 14%

Preferred Stock of Ford Motors Pays a Dividend of $3