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Question(s) / Instruction(s):

A firm has issued preferred stock at its $125 per share par value. The stock will pay a

$15 annual dividend. The cost of issuing and selling the stock was $4 per share. The

cost of the preferred stock is 

a.            7.2 percent

b.            12 percent.

c.             12.4 percent

d.            15 percent

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