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Accounting

Problem:

ABC Inc.'s perpetual preferred stock sells for $73.7 per share, and it pays an $8.4 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $4 per share.

Task:

Question: What is the company's cost of preferred stock for use in calculating the WACC?

Note: Provide support for rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167290

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