After-tax cost of preferred stock

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Calculate the after-tax cost of preferred stock for Bozeman-Western Airlines Inc. which is planning to sell $10 million of $6.50 cumulative preferred stock to the public at a price of $50 a share. Issuance costs are estimated to be $2 a share. The company has a marginal tax rate of 40 percent.

Reference no: EM13846896

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