Answer:<u> </u><u><em>Relevant cost of new preferred stock = 10.53%</em></u>
Explanation:
Given:
Dividend = $4.00 per share
Selling for = $40 per share.
Flotation costs = 5% of the selling price.
Marginal tax rate is 30%.
We can compute the cost of new preferred stocks using the following formula:


∴ Relevant cost of new preferred stock = 10.53%
Therefore, the correct option is (d)
Answer:
b. variable life
Explanation:
Variable life insurance pays a premium in case the insured dies (that is a guaranteed benefit), but it also allows the beneficiary to invest a portion of the proceeds in different types of investments. These investments may include stocks, mutual funds, bonds, etc., that eventually grow and increase in value.
A town might decide to issue bonds to B) to build new roads or bridges. A town will achieve a specified amount of money by issuing the bond and there must be an obvious source for returning the bond value until its maturity date. Therefore, building projects or other projects related to the town's infrastructure would be the most appropriate reason for a town to issue bonds.