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Zizzy Ltd faces a corporate tax rate of 40%. It is planning to issue preference shares at an offer price of $500 per share. A
Zizzy Ltd faces a corporate tax rate of 40%. It is planning to issue preference shares at an offer price of $500 per share. A $30 dividend is expected to be paid annually. Issue costs are estimated to be 10% of the offer price. Calculate the before-tax cost of preference shares for Zizzy Ltd. Select one: a. 0.067% b. 0.11% c. 9.00% d. 11.11%
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