Determine the after-tax cost of preferred stock


A firm's preferred stock pays an annual dividend of $2, and the stock sells for $65. Flotation costs for new issuances of preferred stock are 5% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 30%?

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Accounting Basics: Determine the after-tax cost of preferred stock
Reference No:- TGS0719929

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