What is the after-tax cost of preferred stock

Assignment Help Financial Management

Reference no: EM131357346

A firm is paying an annual dividend of $9.00 for its preferred stock which is selling for $65.00. There is a selling cost of $2.00. What is the after-tax cost of preferred stock if the firm's tax rate is 36%? (Round your answer to 2 decimal places.)

16.44%

15.74%

12.94%

14.29%

Reference no: EM131357346

Questions Cloud

How much would that investment be worth today : Investments in the stock market have increased at an average compound rate of about 5% since 1912. It is now 2013. If you invested $1,000 in the stock market in 1912, how much would that investment be worth today?

Bankers prefer short-term bank credit : Bankers prefer short-term bank credit because it is an excellent way of financing

Market share in its foreign markets : In the face of an appreciating home currency, a MNC can focus on profit margins or market share in its foreign markets. Explain how the price elasticity of demand for its product and economies of scale should influence their focus.

What is the change in the real exchange rate : The japanese yen devalues by 2% this year. If the Japanese and U.S inflation rates were 6% and 2%, respectively, what is the change in the real exchange rate?

What is the after-tax cost of preferred stock : A firm is paying an annual dividend of $9.00 for its preferred stock which is selling for $65.00. There is a selling cost of $2.00. What is the after-tax cost of preferred stock if the firm's tax rate is 36%?

Capital management is interested in financing and management : A Finance manager who is reviewing working capital management is interested in the financing and management of

Calculate the profit or loss on the spot position : A multinational financial institution in Chicago wishes to transfer 50,000,000 from a bank in Berlin, Germany. The transfer will take place in February although the transaction will be hedged with March euro futures contract - which matures one month..

Need assuming no further generated increase in liabilities : Wilson Corporation projects net income next year to be $606,000. Accounts receivable and Inventory will have to be increased by $292,000 to accommodate this sales level. Wilson will pay dividends of $394,000. How much external financing will Wilson C..

What is the optimum order size : Massa Machine Tool expects total sales of $19,000. The price per unit is $8. The firm estimates an ordering cost of $13.28 per order, with an inventory cost of $1.12 per unit. What is the optimum order size?

User Account

All Pages