Perpetual preferred stock from Franklin Inc. sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

cost of preferred stock   = 9.08%

Explanation:

given data

sells = $97.50 per share

pays annual dividend =  $8.50

flotation cost = 4.00% of price paid

solution

we get her  cost of preferred stock that is express as

cost of preferred stock  =    .......................1

put here value and we will get

cost of preferred stock   =

cost of preferred stock   =  

cost of preferred stock   = 9.08%

answer; standing committee;

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total