Estimate the cost of preferred stock is

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Question 1: A company has preferred stock with a current market price of $20 per share. The preferred stock pays an annual dividend of 5% based on a par value of $100. Flotation costs associated with the sale of preferred stock equal 5% of the market price per share. The company's marginal tax rate is 21%. Therefore, the cost of preferred stock is

Reference no: EM132498370

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