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Answer: B
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Which of the following equations correctly illustrates the calculation of the cost of perpetual preferred equity?
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Answer: F
Explanation:
Explanation/Reference:
Explanation:
The cost of perpetual preferred equity can be found by dividing the annual dividend by the net offering price, or gross offering price less flotation costs. Of the six answers listed, only #2 represents a recognized financial equation; the rest are largely fictitious.
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