SOLUTION: Perpetual preferred stock from Franklin Inc. sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a f

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Question 1149512: Perpetual preferred stock from Franklin Inc. sells for $97.50 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC?

a. 9.08%

b. 8.72%

c. 9.82%

d. 9.44%

e. 10.22%


Answer by ikleyn(52781) About Me  (Show Source):
You can put this solution on YOUR website!
.

Let me explain you something.

There is the area of Math problems and there is the area of Finance problems.

There is some intersection of these two areas.

While the problem is in Math, we can help.

Even if the problem is in intersection area, we still can help.

But THIS problem is strictly in the Finance area, highly specialized.

In this area we CAN NOT help at this forum.

So, you simply waste your time, posting this problem and such problems to this forum.

Find another, more appropriate site for your needs.