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A firm's preferred stock pays an annual dividend of $ 3 , and the stock sells for $ 7 4 . Flotation costs for new

A firm's preferred stock pays an annual dividend of $3, and the stock sells for $74. Flotation costs for new issuances of preferred stock are 7% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 37%?

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