Computing cost of preferred stock, Finance Basics

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Computing cost of preferred stock

Bennington is considering issuing shares of perpetual preferred stock. The preferred stock would have a face value of $100 per share and pay a fixed annual dividend of $7.20 per share. The flotation cost associated with issuing this preferred stock is 6% of each share's face value. What is Bennington's cost of preferred stock?

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Finance Basics: Computing cost of preferred stock

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