Question
ABC Telecom Inc.has preferred stock that pays a dividend of $5 per share and sells for $100 per share. It is considering issuing new shares
ABC Telecom Inc.has preferred stock that pays a dividend of $5 per share and sells for $100 per share. It is considering issuing new shares of preferred stock. These new shares incur an underwriting ( or flotation ) cost of 2.2%. How much will ABC Telecom Inc. pay per share to the underwriter? Based on this information what is ABC Telecom Inc's cost of preferred stock capital?
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Small Business Management Launching and Growing New Ventures
Authors: Justin Longenecker, Leo Donlevy, Terri Champion, William Petty, Leslie Palich, Frank Hoy
6th Canadian edition
176532218, 978-0176532215
