Problemtonkinon companys perpetual preferred stock sells, Ask an Expert

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Problem:

Tonkinon Company's perpetual preferred stock sells for $67 per share and pays a $3.75 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the price paid by investors.

Required:

Question: What is the company's cost of preferred stock?

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168538

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