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yanalaym [24]
3 years ago
15

J&J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100 a share. The company has determ

ined that stocks with similar characteristics provide a return of 8.2 percent. What should the offer price be?
Business
1 answer:
Studentka2010 [4]3 years ago
3 0

Answer:

$65.85

Explanation:

Calculation for What should the offer price be

Using this formula

Offer price=(Preferred stock× Liquidating value)/Return

Let plug in the formula

Offer price = (0.054 × $100) / 0.082

Offer price=5.4/0.082

Offer price = $65.85

Therefore the offer price should be $65.85

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