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Business, 10.12.2019 20:31 jaydenhoward

The cfo of peaceful book binding company has decided that the company needs to raise additional capital. it can sell preferred stock paying an annual $6 dividend per share for $100 per share; however, it will incur a flotation cost of 2.7% per shareafter it pays the underwriter, red oyster seafood company will receive from each share of preferred stock that it issues. based on this information, red oyster seafood company's cost of preferred stock is when raising funds by issuing new preferred stock, the company will incur an underwriting, or flotation, cost that the cost of preferred stock.

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