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What is the company annual cost of new preferred stock

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Reference no: EM132740425

Problem 1: A company's perpetual preferred stock has a par value of $65 per share and it pays a dividend rate of 6.25% per year. The preferred stock's market value is $58.63 per share and the company's tax rate is 31%. If the flotation costs for preferred stock are 6.5%, what is the company's annual cost of new preferred stock financing?

Reference no: EM132740425

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