A company's perpetual preferred stock currently trades at $87.50 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) 8.25%
B) 8.69%
C) 9.14%
D) 9.62%
Correct Answer:
Verified
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