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A Corporation Has $5,000,000 of 8 Percent Preferred Stock Outstanding

Question 93

Multiple Choice

A corporation has $5,000,000 of 8 percent preferred stock outstanding and a 40 percent tax rate. The after-tax cost of the preferred stock is ________.


A) $400,000
B) $240,000
C) $666,667
D) $160,000

Correct Answer:

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