![Problem 11-13 Cost of preferred stock (LO11-3] Medco Corporation can sell preferred stock for $116 with an estimated flotatio](http://img.homeworklib.com/questions/1985c720-77ed-11ea-ac8f-9be9d0393fdc.png?x-oss-process=image/resize,w_560)
Homework Answers
Price of stock - Flotation cost = Dividend per share/Cost of Preferred Stock
= 116 - 6 = 5/Cost of Preferred Stock
Cost of Preferred Stock = 4.55%
b.No, since dividend paid on preferred stock is not tax deductible
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Problem 11-13 Cost of preferred stock (LO11-3] Medco Corporation can sell preferred stock for $116 with...
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