Homework #6F (Cost of equity financing)

Homework #6F (Cost of equity financing)

Finance

Question 4 (1 point)

Nature Food Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $2.56 per year. That preferred stock is currently selling for $55.01. However, the underwriter would charge flotation costs of $3.59 per share. What is the form’s cost of preferred stock financing?

Round the answers to two decimal places in percentage form.