1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
yaroslaw [1]
3 years ago
14

A company plans to issue new Preferred Stock that pays 6% on the Par Value of $25. Similar preferred stocks are current selling

in the market for Pp = $28. If the firm expects flotation costs of 8% per share, then what is the cost of newly issued preferred stock to the firm? The firms tax rate = 40%.
Business
1 answer:
statuscvo [17]3 years ago
6 0

Answer:

The cost of newly issued preferred stock to the firm is 5.82%

Explanation:

Annual dividend = $25 * 6% = $1.5

Present price = $28

Flotation costs = 8% = 8/100 = 0.08

Cost of new stock = Annual dividend / [Current price(1 - flotation costs)]

Cost of new stock = 1.5 / [ 28(1 - 0.08)]

Cost of new stock = 1.5 / [ 28(0.92)]

Cost of new stock = 1.5 / 25.76

Cost of new stock = 0.0582

Cost of new stock = 5.82% (Approx).

You might be interested in
________ is the ability of a country to produce a specific good at a lower opportunity cost than its trading partners.
Maslowich
Comparative advantage
3 0
3 years ago
For years, the network administrator at your company performed off-site backups by putting a set of tapes in his home safe every
Oduvanchick [21]

Answer:

The disadvantages of cloud back-ups are:

  • It is relatively more expensive
  • Its' efficiency depends totally on the speed of the internet service provider. If the provider of the service has slow bandwidth and the internet is slow, then it may take a very long time to retrieve the backups.
  • Where there is no internet access at all, it becomes impossible to get the back-ups.

Explanation:

When companies opt to save a copy of their data on a location other than their physical location such as a remote server, it is referred to as Cloud-Backup. On-site back-ups on the other hand entail saving company data on a physical apparatus such as disks, drives, etc.

Data back-up is essential to maintain business continuity. If a business such as a telecommunications company lost all of its data including those of its customers, it most likely will go belly-up.

Another reason why people opt for Cloud-backup is that it saves the offers increased security and ease of maintenance.

Cheers

7 0
3 years ago
Direct materials, direct labor, and factory overhead cost variance analysis
vova2212 [387]

Answer:

. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Explanation:

4 0
3 years ago
Sheila is hosting a large diplomatic event and needs to increase her inventory of dinnerware sets. She has set a $1925 budget an
svp [43]

Answer:

Demand curve for Sheila's plates and cups

Q = 22.5 - \frac{1}{2}P

Explanation:

we have to write the demand function for Shiela's

Q = b - aP

we solve for a solving for the line that cross two points:

\frac{P_2-P_1}{Q_2-Q_1} = a

\frac{25 - 35}{35 - 30} = a

\frac{-10}{5} = a

- \frac{1}{2} = a

Then we solve for b:

35 = b - 1/2(25)

35 - 1/2(25) = b

b = 22.5

Last we build the demand curve

Q = 22.5 - \frac{1}{2}P

6 0
3 years ago
According to the savings–investment spending identity:
frozen [14]

Answer:

a) savings equals investment spending.

Explanation:

Savings is the part of the income that is not used and investment is money that is spent on capital. Savings-investment spending identity is a concept that says that the amount saved in an economy equals the amount invested. This because investments depend on the amount of savings available.

6 0
3 years ago
Other questions:
  • For each of the items indicate whether its amount affects the bank or book side of a bank reconciliation and is an addition or a
    8·2 answers
  • Smith & Sons, Inc., is authorized to issue one million shares of $1 par value common stock. The company actually sells 500,0
    13·1 answer
  • 1. In what way do organization charts create a picture of an<br> organization?
    13·1 answer
  • As learning and trade progressed, the medieval structure began to break down.
    5·1 answer
  • What is the principal difference between less developed and more developed countries with regard to the percentages of primary,
    11·1 answer
  • Shelton, Inc., has sales of $20 million, total assets of $18.2 million, and total debt of $9.1 million. Assume the profit margin
    5·1 answer
  • How are maquiladoras similar to sweatshops? I. Workers are paid very low wages in both systems. II. Both are prevalent in underd
    11·1 answer
  • Blart Corp. recently paid a dividend of $5.00 per share. Analysts forecast future dividends will increase by 2% forever. The req
    6·1 answer
  • Over the past four years, the annual percentage returns on large-company stocks were 15, 7, 4, and 18%. For the same time period
    11·1 answer
  • Which factor would credit card companies most likely use to determine an
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!