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    Cost of Capital - Preferred Stock

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    - Calculate the after-tax cost of preferred stock for Bozeman-Western Airlines, Inc., which is planning to sell $10 million of $4.50 cumulative preferred stock to the public at a price of $48 a share. The company has a marginal tax rate of 40 percent.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:37 pm ad1c9bdddf
    https://brainmass.com/business/accounting/cost-of-capital-preferred-stock-191275

    Solution Preview

    After tax cost of preferred stock = dividends per stock/Net price ...

    $2.19

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