P97 Cost of preferred stock Taylor Systems has just issued preferred stock. The stock has a 12%

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P9–7 Cost of preferred stock Taylor Systems has just issued preferred stock. The stock has a 12% annual dividend and a $100 par value and was sold at $97.50 per share.

In addition, flotation costs of $2.50 per share must be paid.

a. Calculate the cost of the preferred stock.

b. If the firm sells the preferred stock with a 10% annual dividend and nets $90.00 after flotation costs, what is its cost?

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Principles Of Managerial Finance

ISBN: 9780133546408

7th Edition

Authors: Lawrence J Gitman, Chad J Zutter

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Question Posted: Jul 23, 2024 08:02 AM

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P97 Cost of preferred stock Taylor Systems has just issued preferred stock. The stock has a 12%

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Principles Of Managerial Finance

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