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pmiller1129 pmiller1129
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A month ago
A firm has 750,000 preferred shares outstanding. Each share has a stated dividend amount of $1.65 per share and are currently priced to yield 7.5%. What is the cost of the preferred shares if the firm's income tax rate is 27% and flotation costs on any new preferred share issue will be 2% before tax?

▸ 7.61%

▸ 7.65%

▸ 30.0%

▸ 7.50%
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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timmcgraw1994timmcgraw1994
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