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Quantitative Problem: Barton Industries can issue perpetual preferred stock at a price of $40 per share. The stock would pay a constant annual dividend of

Quantitative Problem: Barton Industries can issue perpetual preferred stock at a price of $40 per share. The stock would pay a constant annual dividend of $3.49 per share. If the firm's marginal tax rate is 25%, what is the company's cost of preferred stock? Round your answer to two decimal places.

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