To estimate the after-tax cost of preferred stock you must: A) multip

To estimate the after-tax cost of preferred stock you must:

A) multiply the cost of preferred by (1 – the tax rate).
B) multiply the cost of preferred by (1 + the tax rate).
C) multiply the cost of preferred by (the tax rate).
D) None of the above because preferred dividend payments are not tax deductible for the firm.

ANSWER

D