Diggin Tools just issued new preferred stock, which sold for P85 in the stock markets. Holders of the stock will receive an annual dividend equal to P9.35. The flotation costs associated with the new issue were 6 percent and Diggin's marginal tax rate is 30 percent. What is Diggins cost of preferred stock, kps?

Diggin Tools just issued new preferred stock, which sold for P85 in the stock markets. Holders of the stock will receive an annual dividend equal to P9.35. The flotation costs associated with the new issue were 6 percent and Diggin's marginal tax rate is 30 percent. What is Diggins cost of preferred stock, kps?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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