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What is cost of issuing preferred stock

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Reference no: EM133275866

Buoyant Cruises plans to issue preferred stock with a $120 par value and a 5% dividend. Even thought the current market value of its preferred stock is $80 per share, Buoyant expects to net only $75 for each share issued.

a. What is its cost of issuing preferred stock? The firm's marginal tax rate is 34%.

Reference no: EM133275866

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