Define the net proceeds of the issue to the firm

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Reference no: EM1365067

The Dowel Jones Company is planning to issue 10,000 shares of $100 preferred stock.

(a) If flotation costs amount to 3%, what will be the net proceeds of the issue to the firm?

(b) If the dividend is $7 annually, what will be the effective cost of preferred stock to the firm?

Reference no: EM1365067

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