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ABC company's preferred stock is currently selling for $24.00, and pays a perpetual annual dividend of $2.40 per share. Underwriters of a new issue of
ABC company's preferred stock is currently selling for $24.00, and pays a perpetual annual dividend of $2.40 per share. Underwriters of a new issue of preferred stock would charge $2 per share in flotation costs. The firm's tax rate is 30%. Compute the cost of new preferred stock for ABC?
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