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Suppose a firm has a preferred stock that pays a $10 annual dividend (no growth expected in this payment) and currently sells for $90.00 per share. If it plans to issue more preferred shares paying the same dividend but also needs to incur a floatation cost of five percent, the firm's cost of preferred stock would be

A 7.81% B 11.7% C 11.11% D 9.10% E 9.56%

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Financial Management, Finance

Category:- Financial Management
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