Calculating the firm cost of preferred stock, Finance Basics

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Calculating the firm cost of preferred stock

A company's perpetual preferred stock currently trades at $87.50 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock?

8.25%

8.69%

9.14%

9.62%

10.11%

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Finance Basics: Calculating the firm cost of preferred stock

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Finance Basics: Calculating the firm cost of preferred stock

Reference No:- TGS056360

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Recent Questions Asked Finance Basics

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Calculating the firm cost of preferred stock

Reference No:- TGS056360

Recent Questions Asked Finance Basics

Q : Funds flow statement and cash flow statement

Q : Appreciation of the australian dollar

Q : System that adds the most value

Q : Prepare a contribution format income statement

Q : Calculating the firm cost of preferred stock

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