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A firm is paying an annual dividend of $7.00 for its preferred stock which is selling for $70.00. There is a selling cost of $2.00.

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A firm is paying an annual dividend of $7.00 for its preferred stock which is selling for $70.00. There is a selling cost of $2.00. What is the after-tax cost of preferred stock if the firm's tax rate is 40%? (Round your answer to 2 decimal places.) Multiple Choice O 10.29% 11.74% O 8.94%

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