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Monica [59]
4 years ago
15

A company’s investment bankers say that a proposed new issue of 7.5 percent cumulative preferred stock with a par value of $10 a

share can be sold to the public for $27 a share. The transaction costs will be $1 a share. What is the company’s cost of preferred stock financing?
Business
1 answer:
Nookie1986 [14]4 years ago
8 0

Answer:

The Answer is as follows;

Explanation:

Dividend on preferred stocks=$10*7.5%=$.075

Transaction Costs=$1

Total financing Cost=$1.75

Which is 17.5% (1.75/10)

The market price is not relevant for company's cost of financing. Therefore we have taken dividend payable on face value and transaction costs of issue for purpose of determination of financing cost.

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mote1985 [20]

Answer:

Hello the options in regards to your question is missing attached below is the complete question

Answer : Private enterprise's investments are in assets that are meant to increase production, which are going to earn revenues and pay for themselves. Thus, private enterprise's spending is unambiguously going towards investments. It is very difficult to determine when the federal government's spending is an investment. ( B )

Explanation:

The federal government's investments are not discussed in relation to a capital budget and recorded as an asset because It is very difficult to determine when the federal government's spending is an investment, because Federal Government is not actually designed to operate as a business entity

4 0
3 years ago
A person's debt ratio shows the relationship between debt and net worth. the lower the ratio the
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<span>A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the better off the person is financially. </span>

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3 years ago
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Answer:

I believe that two different questions have been mixed into one:

Coercive acts:

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Explanation:

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3 years ago
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aleksandrvk [35]

Answer:

540,000 units

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Budgeted Production Units:

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= 570,000 units + 68,000 units - 98,000 units

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3 years ago
The budgeting process​ ________.
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