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Compute cost of preferred stock.

Medco corporation can sell preferred stock for $80 with an estimated flotation cost of $3.00. It is anticipated that the preferred stock will pay $6 per share in dividends.
a) compute the cost of preferred stock for Medco corp.
b) do we need to make a tax adjustment for the issuing firm?

maryone Sun 07/09/08 02:11

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