Answer:
5.87%
Explanation:
The computation of the cost of preferred stock is shown below:
Cost of preferred stock = Annual dividend ÷ Price of preferred stock per share
where,
Annual dividend is
= Coupon rate × par value of the share
= 5.60% × $100
= $5.6
And, the price of preferred stock per share is $95.34
So, the cost of the company preferred stock is
= $5.6 ÷ $95.34
= 5.87%
