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borteleto borteleto
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5 years ago
JPR Company's preferred stock is currently selling for $28.00, and pays a perpetual annual dividend of $2.00 per share. Underwriters of a new issue of preferred stock would charge $3 per share in flotation costs. The firm's tax rate is 40%. Compute the cost of new preferred stock for JPR.
A) 4.80%
B) 7.14%
C) 8.00%
D) 9.15%
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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#2
5 years ago
Thanks for your help!
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