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What is the firm cost of preferred stock

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Question - A company's perpetual preferred stock currently sells for $98.50 per share, and it pays an $7.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 8.00% of the issue price. What is the firm's cost of preferred stock?

A. 7.72%

B. 8.22%

C. 8.83%

D. 9.10%

E. 9.40%

Reference no: EM132091937

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