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( Cost of preferred stock ) Your firm is planning to issue preferred stock. The stock sells for $123; however, if new stock is issued,

(Cost of preferred stock) Your firm is planning to issue preferred stock. The stock sells for $123; however, if new stock is issued, the company would receive only $105.78. The par value of the stock is $100, and the dividend rate is 16 percent. What is the cost of capital for the stock to your firm?

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