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borteleto borteleto
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6 years ago
A company has preferred stock that can be sold for $21 per share. The preferred stock pays an annual dividend of 3.5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.25 per share. The company's marginal tax rate is 35%. Therefore, the cost of preferred stock is
A) 18.87%.
B) 17.72%.
C) 14.26%.
D) 12.94%.
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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guzmanguzman
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borteleto Author
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6 years ago
Happy Dummy I'm impressed
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