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
neonofarm [45]
3 years ago
14

A company's perpetual preferred stock currently sells for $102.50 per share, and it pays an $8.00 annual dividend. If the compan

y were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock?
Business
2 answers:
oksian1 [2.3K]3 years ago
8 0

Answer:

9.10%

Explanation:

The formular for finding the cost of preferred stock is:

rp=Dp/(Pp(1-F))

Preffered stock price (Pp) = $92.50

Preferred dividend (Dp) = $8.00

Flotation cost (F) = 5%

5×100

=0.05

Therefore,

rp= 8.00/(92.50(1-0.05))

rp= 8.00/(92.50(0.95))

rp= 8.00/87.87

rp= 0.0910×100

rp= 9.10%

Thus, the cost of preferred stock is 9.10%

Alex73 [517]3 years ago
6 0

Answer:

8.21%

Explanation:

We can calculate this by the simple formula:

Price*(1 - Flotation cost) = Dividend/Cost of Pref. stock

Hence the formula turns into:

Cost of Pref. stock = Dividend / Price*(1 - Flotation costs)

Cost of Pref. Stock = 8 / 102.50*(1 - 0.05)

Cost of Pref. Stock = 8.21%

Hope this clear things up.

Good luck and cheers.

You might be interested in
A goal that you want to achieve within the next year is what type of goal
Elan Coil [88]
This goal is called a short term goal.
5 0
3 years ago
Read 2 more answers
to prepare for a career in business communication, you need to become competent in which areas? (choose every correct answer.)
SSSSS [86.1K]

To prepare for a career in business communication, you need to become competent in these  areas:

  • New media literacy
  • Teamwork and collaboration
  • Social intelligence

<h3>What is the business communication career?</h3>

Business communication can be described as one of the careers that involves the sending as well as receiving of effective communications between parties.

It should be noted that this career can be seen as one that is very important within a corporation as well as  organization, or business  because every organization needs the communication medium where they can exchange information whether within the organization or with the outside organization.

In conclusion, anyone that want to choose a career in the business communication needs to be a computer-literate because there are some tools that will be needed in working in the organization, therefore, one need to know how to use the computer effectively.

Learn more about career at:

brainly.com/question/6947486

#SPJ1

missing options:

New media literacy

Teamwork and collaboration

engagement

Social intelligence

5 0
1 year ago
At a computer-consulting firm, the number of new clients that they have obtained each month has ranged from 0 to 6. the number o
Rudiy27

Answer:

3.05

Explanation:

The computer consulting firm is analyzing the performance of its company based on new clients each month. The data is given for six months and the probability distribution for number of new clients per month that the company has gained. The probability sum equals to 1 for the six months. The variance distribution is the squared value of each the difference by the mean. values of probability are squared and then their sum is taken to calculate variance deviation.

4 0
3 years ago
As a result of a decrease in the demand for U.S. dollars, there has been depreciation in the value of the U.S. dollar relative t
Aleks [24]

Answer:

A. Todd, American, to visit Macedonia spring brew

Explanation:

<em>Todd is a loser due to the depreciation of the U.S. dollar because now he will need more dollars to buy a comparative amount of South Korea won. His trip will now be more expensive. </em>

<em> An investment bank in South Korea, interested in purchasing U.S. government bonds - winner </em>

<em> The investment bank will exchange fewer wons for U.S. dollars than before. Buying government bonds will now be cheaper for them. </em>

<em> Goodyear, a firm based in the United States, sells car tires in South Korea - winner </em>

<em> Goodyear will likely sell more cars because for its South Korean customers, the cars are now cheaper since the value of the dollar has depreciated against the currency that they hold. </em>

<em> A family from South Korea visits relatives in the United States - winner </em>

<em> The South Korean family will exchange fewer wons for more U.S. dollars, making their trip cheaper. </em>

<em> A firm from South Korea sells handbags in the United States - loser </em>

<em> The handbags will now be more expensive for their American customers, likely causing a loss in sales revenue for the firm. </em>

<em> An electronics manufacturer in the United States, purchases a high tech company in South Korea - loser </em>

<em>The cost of the high-tech South Korean company is now higher for the American manufacturer because more dollars had to be exchanged for wons before the purchase.</em>

4 0
3 years ago
If a country's money supply is $10 million, and there is only one bank where all of the people deposit their money. If the bank
Luden [163]

Answer:

The money multiplier of the economy is 20

Explanation:

Money multiplier is the term of economics which is defined as the maximum amount, the money supply could rise grounded on the increase in the reserve in the system of banking.

The formula used for computing the money multiplier is as:

Money Multiplier = 1 / r

where

r is the reserve ratio that is 5%

So, putting the same value above:

Money Multiplier = 1 / 5%

Money Multiplier = 20

7 0
3 years ago
Other questions:
  • Compared to tangible resources, intangible resources are ____ and ____. more visible; less difficult to copy. less visible; less
    9·1 answer
  • Janice bought her house in 2008 for $395,000. since then, she has deducted $70,000 in depreciation associated with her home offi
    14·2 answers
  • Kennedy Enterprises has budgeted sales for the months of September and October at $ 110 comma 000 and $ 170 comma 000​, respecti
    15·1 answer
  • Which of the following taxpayers does not have to file a tax return for 2019?
    7·1 answer
  • 2 features of public limited companies
    11·1 answer
  • If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilib
    14·1 answer
  • . A shop that makes candles offers a scented candle, which has a monthly demand of 400 boxes. Candles can be produced at a rate
    13·1 answer
  • Robin inherits 1,000 shares of Wal-Mart stock from her aunt Julieta in 2020. According to the information received from the exec
    7·1 answer
  • If there is a net loss there will be a ___________ balance in the Income Summary account after all closing entries have been pos
    8·1 answer
  • 6. Which of the following is NOT true about raising capital?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!