Answer:
the company’s cost of preferred stock is 10.53%.
Explanation:
given information:
perpetual preferred stock = $57.00
a constant annual dividend = $6.00
to determine the company’s cost of preferred stock we can use the following formula
%
therefore, the company’s cost of preferred stock is 10.53%.
Answer:
13%
Explanation:
As per the situation the solution of required rate of return first we need to find out the beta which is shown below:-
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
11% = 7% + Beta × 6%
Beta = 1
now If the market risk premium increased to 6% so,
The required rate of return = 7% + 1 × 6%
= 13%
Therefore for computing the required rate of return we simply applied the above formula.
Answer:
The aggregate demand will fall
Explanation:
The aggregate supply measures the quantity of real GDP that can be supplied by in the economy at different price levels. it measures planned output if both prices and average wage rates can change, the Long run aggregate supply curve is assumed to be vertical (this means it remains constant when the general price level changes).
The leftward shift in aggregate supply means that at the same price levels the quantity supplied of real GDP has decreased. This is mostly due to natural disasters or other supply shocks like economic depression, when there is leftward shift in aggregate there would be fewer workers available to produce goods at any given price.
