ABC Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock
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Question:
ABC Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $2.15 per year. That preferred stock is currently selling for $65.66. However, the underwriter would charge flotation costs of $3.00 per share.
What is the firm's cost of preferred stock financing?
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