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A firm is paying an annual dividend of $2.50 for its preferred stock which is selling for $50.00. There is a selling cost of $4.00.

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A firm is paying an annual dividend of $2.50 for its preferred stock which is selling for $50.00. There is a selling cost of $4.00. What is the after-tax cost of preferred stock if the firm's tax rate is 33%? Multiple Choice 5.00% 6.20% 0 5.43% 8.00%

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