Question: Question 25 2 Points Quest, Inc.'s 8% stock ($75 par value) is selling for $80 a share. If the firm's marginal tax rate were 50

  2. Question 25

    2 Points

    Quest, Inc.'s 8% stock ($75 par value) is selling for $80 a share. If the firm's marginal tax rate were 50 percent, the cost of new preferred would be closest to ________, assuming that the firm maintains its current capital structure in market value terms.

    1. 4%

    2. 3.8%

    3. 7.5%

    4. 9%

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