Assume that a firm can issue preferred stock that has a $70 par value and...
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Assume that a firm can issue preferred stock that has a $70 par value and pays a 15.0% annual dividend each year. The firm's investment bankers believe that investors will be willing to pay $84.00 per share and that flotation costs will be equal to $8.45 per share. Given this information, determine the difference between the investor's required rate of return, and the firm's cost of preferred stock. 1.969% 1.398% 1.683% 2.541% 2.224%
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