What is the company cost of preferred stock

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Reference no: EM131176475

Ristretto Co. has 100,000 shares of preferred stock outstanding, currently trading at $80 per share, and paying an annual dividend of $4. It also has a bond issue outstanding with a face value of $2 million, a coupon rate of 6%, and priced at 97 percent of par. 1 million shares of common stock trade at $60 per share, are expected to pay a dividend of $2 per share next year, with a growth rate of 3%. What is the company’s cost of preferred stock?

Reference no: EM131176475

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