Compute cost of preferred stock.

maryone | 03:11 Sun 07th Sep 2008 | Business & Finance

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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?

how do you compute the wieghted average cost of capital?

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