What is the firm cost of preferred stock financing

Reference no: EM131796678

Question: Nature Food Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $4.06 per year. That preferred stock is currently selling for $83.35. However, the underwriter would charge flotation costs of $3.86 per share. What is the firm's cost of preferred stock financing?

Round the answers to two decimal places in percentage form.

Reference no: EM131796678

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