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Cost of the preferred stock

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Ten years ago, Stigler Company issued $100 par value preferred stock yielding 8%. The preferred stock is now selling for $97 per share. What is the current yield or cost of the preferred stock? (disregard flotation cost)

a. 7.76%
b. 8%
c. 8.25%
d. there is not enough information to answer the question

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Solution Summary

The response provides the steps to estimate cost of the preferred stock.

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