Compute the value of preferred stock

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Reference no: EM1366823

Medco Company can sell preferred stock for $80 with an estimated flotation expense of $3. It is anticipated that the preferred stock will pay $6 per share in dividends.
a. Compute the cost of preferred stock for Medco Corp.
b. Do we need to make a tax adjustment for the issuing firm?

Reference no: EM1366823

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