Homework help...cost of preferred stock (rp)?

Posted on 2014-04-21 06:47:00 in Finance by MARLEN

We did a problem in finance class to calculate the WACC and I'm trying to practice and re-do it again but I can't remember how we got the rate for the preferred stock.



"Preferred stock: 7,000 shares of 6 percent preferred stock selling at $93 per share."



We calculated the following...



rp= Dp/Pp



rp=5.58/93=6%



I'm not sure where we got the 5.58 from. Is the coupon rate 6% just the same as the rate for the preferred stock?



Any feedback would be greatly appreciated, thank you!



P.S.-I'm not a finance major...just a prerequisite at my university:[

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