What is the cost of preferred stock financing

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Reference no: EM131016005

(Cost of preferred stock) The preferred stock of Gator Industries sells for $35.97 and pays $2.74 per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 510,000 more preferred shares just like the ones it currently has outstanding, it could sell them for $35.97 a share but would incur flotation costs of $3.03 per share. What are the floatation costs for issuing the preferred shares and how should this cost be incorporated into the NPV of the project being financed?

The firm's cost of preferred stock financing is___% (Round to two decimal places.)

Reference no: EM131016005

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