Answer: 10.13%
Explanation:
The after-tax return on the preferred shares would be:
= After-tax return + Premium required
= (8.8% * (1 - 25%)) + 1%
= 7.6%
For the preferred stock to be issued at par with the above after tax return:
= After tax return / ( 1 - tax)
= 7.6% ( 1 - 25%)
= 10.13%
Answer: Did u find out the anser?
Explanation: Im taking the quiz now
From what I understood in the problem, the total budget that covers all types of media is only $1,000 per month. For the allocation, each type of media would get at least 25% of the budget. If we infer on this information, there should only be 4 types of media, at least. This is because four 25% portions would equal to 100%. If it exceeds 25% for each of the four types, it would be over the $1000 budget. With that being said, it is also possible that there will be 3 or 2 types of media. Nevertheless, let's just stick to the least assumption of 25% for each of the 4 types.
If local newspaper advertising is one of the four types, then:
$1000(25%) = $250
It would get $250 from the overall budget.