Business, 08.07.2021 15:10 nockturnal1993

Preferred stock is a hybrid security because it has some characteristics typical of debt and others typical of equity. The following table lists various characteristics of preferred stock. Determine which of these characteristics is consistent with debt and which is consistent with equity. Characteristics Debt Equity
Dividends are fixed.
Usually has no specified maturity date

At the present time, Tamin Co. does not have any preferred stock outstanding but is looking to include preferred stock un its capital structure in the future. Tamin has found some institutional investors that are willing to purchase its preferred stock issue provided that it pays a perpetual dividend of $13 per share. If the investors pay $130.45 per share, Taemin's cost of preferred stock will .

a. 11.5%
b. 10.0%
c. 9.5%
d. 9.0%

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Preferred stock is a hybrid security because it has some characteristics typical of debt and others...

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