What is the companys cost of preferred stock

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Reference no: EM131376102

1. Tunney Industries can issue perpetual preferred stock at a price of $50 a share. The issue is expected to pay a constant annual dividend of $3.80 a share. The flotation cost on the issue is estimated to be 5 percent. What is the company's cost of preferred stock, r_ps?

2. Javits & Sons' common stock is currently trading at $30 a share. The stock is expected to pay a dividend of $3.00 a share at the end of the year (D₁ = $3.00), and the dividend is expected to grow at a constant rate of 5 percent a year. What is the cost of common equity?

Reference no: EM131376102

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