None 1. Harmony, Inc. issued $100 par, 7.25% preferred stock four years ago. The stock iscurrently selling for $85.50. Floatation costs on new preferred shares are expected toaverage 11% of the funds raised. What is Harmony's cost of preferred stock?

Step 1: Calculate the dividend per share.Dividend per share = Par value × Dividend rateDividend per…

Answered: 1. Harmony, Inc. issued $100 par, 7.25%…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 14P

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1. Harmony, Inc. issued $100 par, 7.25% preferred stock four years ago. The stock is currently selling for $85.50. Floatation costs on new preferred shares are expected to average 11% of the funds raised. What is Harmony's cost of preferred stock?