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Warephase Corporation has preferred stock outstanding. The stock has a 15% dividend rate. The stocks market price is $85 per share, and its par value

Warephase Corporation has preferred stock outstanding. The stock has a 15% dividend rate. The stock’s market price is $85 per share, and its par value is $77. If new shares are issued, the firm will pay $4 per share in flotation costs. The corporate tax rate is 21%. 


What is the company’s cost of preferred stock financing?

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