Floatation costs for issuing the preferred shares

Assignment Help Accounting Basics

Reference no: EM13787353

The preferred stock of Gator Industries sells for $34.65 and pays $2.79 per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 515,000 more preferred shares just like the ones it currently has outstanding, it could sell them for $34.65 a share but would incur flotation costs of $2.89 per share. What are the floatation costs for issuing the preferred shares and how should this cost be incorporated into the NPV of the project being financed?

Reference no: EM13787353

Questions Cloud

Distinguish between a packing slip : Distinguish between a packing slip, shipping notice, and a bill of lading. List two points in the sales processing system when authorization is required.

Important benefit of asymmetrical encryption : What is the most important benefit of asymmetrical encryption? Contrast with symmetrical encryption - Which part of CAIN is realized through the use of message digest functions and hashes?

Evaluate the attractiveness of the pc industry : Evaluate the attractiveness of the PC industry using Porter's Five Forces framework. Under what conditions you would prefer a joint venture as a strategy to enter a foreign market

A sample of the material : How many moles of TNAZ are there in a sample of the material that has a volume of 1.00 cm3? e) If a 1.00 cm3 sample of TNAZ is detonated, how many grams of CO2 are produced? (4) f) What mass of TNAZ would have to be detonated to produce 175 g of wate..

Floatation costs for issuing the preferred shares : What are the floatation costs for issuing the preferred shares and how should this cost be incorporated into the NPV of the project being financed?

How many grams of nitrogen monoxide : 1. How many grams of bromine are needed to react with 69.4 g of lithium to produce lithium bromide? 2 Li(s) + Br2(l) ?? 2 LiBr(s) 2. According to the following equation, how many grams of carbon are produced by the complete decomposition of 50.0 g of..

Four elements of a firm credit policy : Firm also try to match long term needs with long term borrowing and short term needs with short term borrowing. Class, explain the four elements of a firm's credit policy

Discussion about aiu project : AIU Project

Write a detailed analysis of story leo tolstoy : Write a detailed analysis of story Leo Tolstoy. In your analysis, you will consider how one or more of the elements of fiction contribute to the meaning (theme) of the story.

User Account

All Pages