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Estimate the cost of preferred stock financing

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AT&T Inc. (T) has a preferred stock issue outstanding on which it pays an annual dividend of $1.95. The stock price is currently at $37.91. If the company were to sell a new issue of preferred stock today with the same characteristics as its outstanding issue, it would incur flotation costs of $1.23 per share. What would you estimate the cost of preferred stock financing to be for the firm?

Reference no: EM132396648

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