Estimate cost of preferred stock financing to be for firm

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Reference no: EM131580974

Ash has a preferred stock issue outstanding on which it pays an annual dividend of $4.25 per share. The most recent stock's closing price was $58.50 per share. If the firm were to sell a new issue of preferred stock today with the same characteristics as its outstanding issue, it would incur flotation costs of $1.375 per share. Based on the most recent closing price for the preferred stock, what would you estimate the cost of preferred stock financing to be for the firm?

Reference no: EM131580974

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