Pental will be issuing new preferred stock worth $5 million. The firm will pay a dividend...

 

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Pental will be issuing new preferred stock worth $5 million. The firm will pay a dividend of $1.75 per share. Each share is expected to have a market price of $32. What is the cost of their preferred stock assuming that their investment banker will charge them flotation costs of $.85 per share? Pental will be issuing new preferred stock worth $5 million. The firm will pay a dividend of $1.75 per share. Each share is expected to have a market price of $32. What is the cost of their preferred stock assuming that their investment banker will charge them flotation costs of $.85 per share?

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To calculate the cost of preferred stock for Pental we need to consider ... View the full answer