Flotation costs for new issuances of preferred stock

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Reference no: EM13950316

A firm's preferred stock pays an annual dividend of $8, and the stock sells for $72. Flotation costs for new issuances of preferred stock are 3% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 38%? (Round your answer to 2 decimal places.)

10.10

12.90

11.45

13.60

Reference no: EM13950316

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