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Costly Corporation is considering a new preferred stock issue. The preferred would have a par value...

Costly Corporation is considering a new preferred stock issue. The preferred would have a par value of $300 with an annual dividend equal to 8.0% of par. The company believes that the market value of the stock would be $564.00 per share with flotation costs of $34.00 per share. The firm's marginal tax rate is 40%. What is the firm's cost of preferred stock?

3.59%
4.26%
4.98%
3.96%
4.53
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