Question 3 (2 points) Listen Costly Corporation is considering a new preferred stock issue. The...
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Question 3 (2 points) Listen Costly Corporation is considering a new preferred stock issue. The preferred would have a par value of $500 with an annual dividend equal to 16.0% of par. The company believes that the market value of the stock would be $462.00 per share with flotation costs of $18.00 per share. The firm's marginal tax rate is 40%. What is the firm's cost of preferred stock? 16.12% 17.32% 19.81% 18.02% 14.62%
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