A company's perpetual preferred stock currently sells for $102.50 per share,and it pays an $8.00 annual dividend.If the company were to sell a new preferred issue,it would incur a flotation cost of 5.00% of the issue price.What is the firm's cost of preferred stock?
A) 8.22%
B) 9.28%
C) 6.90%
D) 9.53%
E) 7.97%
Correct Answer:
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