The cost of preferred stock is computed the same as the:

a. pre-tax cost of debt.
b. return on an annuity.
c. aftertax cost of debt.
d. return on a perpetuity.
e. cost of an irregular growth common stock

Two types of stock are common and preferred. Preferred stockholders do not have voting rights but they have a higher claim to earnings and assets as compared to the common stockholders. In the case of preferred stock, a fixed annual dividend is obtained forever. So, the cost of preferred stock is computed the same as the return on a perpetuity

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The cost of preferred stock is computed the same as the: a. pre-tax cost of debt. b. return on an annuity. c. aftertax cost of debt. d. return on a perpetuity. e. cost of an irregular growth common stock

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The cost of preferred stock is computed the same as the:

a. pre-tax cost of debt.
b. return on an annuity.
c. aftertax cost of debt.
d. return on a perpetuity.
e. cost of an irregular growth common stock