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Compute the cost of preferred stock for medco corp

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Reference no: EM131947775

Medco Corporation can sell preferred stock for $104 with an estimated flotation cost of $5. It is anticipated the preferred stock will pay $15 per share in dividends.

a. Compute the cost of preferred stock for Medco Corp. (Input your answer as a percent rounded to 2 decimal places.)

b. Do we need to make a tax adjustment for the issuing firm?

Reference no: EM131947775

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