Describe the benefit to insurers of issuing surplus

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Reference no: EM132061423

1. Explain how regulators use the risk-based capital (RBC) method to evaluate an insurer’s capital.

2. You have 100,000 shares of $100 par, 9% dividend perpetual preferred stock oustanding. The current market price is $90. Any new issues of preferred stock would incure a $3.00 per share flotation cost. What is the cost of preferred stock?

3. Describe the benefit to insurers of issuing surplus notes to provide capital.

Reference no: EM132061423

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