Calculate the after-tax cost of preferred stock

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Reference no: EM13826224

Calculate the after-tax cost of preferred stock for Marriot Hotel Corporation, which is planning to sell $200 million of $4.15 cumulative preferred stock to the public at a price of $48 per share. Flotation costs are $2.50 per share. Marriot has a marginal income tax rate of 40%.

A. 5.86%

B. 9.76%

C. 9.12%

D. 5.47%

Reference no: EM13826224

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