Problem:
Jensen's Travel Agency has 12 percent preferred stock outstanding that is currently selling for $51 a share. The market rate of return is 8 percent and the firm's tax rate is 34 percent.
Required:
Question: What is Jensen's cost of preferred stock?
- 8.00 percent
- 7.92 percent
- 26.01 percent
- 15.69 percent
- 23.53 percent
Note: Please show guided help with steps and answer.