Tunney industries can issue perpetual preferred stock

Assignment Help Financial Management

Reference no: EM131352325

Cost of Preferred Stock

Tunney Industries can issue perpetual preferred stock at a price of $56.00 a share. The stock would pay a constant annual dividend of $7.00 a share. What is the company's cost of preferred stock, r_p? Round your answer to two decimal places.

Reference no: EM131352325

Questions Cloud

Required return on avondale stock : You own 1,100 shares of stock in Avondale Corporation. You will receive a $2.00 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $48 per share. The required return on Avondale stock is 20 percent. Ignoring tax..

Investors expect microtech to begin paying dividends : Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.75 coming 3 years from toda..

Formulate linear programming model-projected annual return : Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual return of 9 percent. Formulate a linear program..

What is the project net present value : A project is expected to create operating cash flows of $29,500 a year for three years. The initial cost of the fixed assets is $61,000. These assets will be worthless at the end of the project. An additional $4,500 of net working capital will be req..

Tunney industries can issue perpetual preferred stock : Tunney Industries can issue perpetual preferred stock at a price of $56.00 a share. The stock would pay a constant annual dividend of $7.00 a share. What is the company's cost of preferred stock, rp?

What is the cost of preferred stock-including flotation : Trivoli Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $110.50; but flotation costs will be 6% of the market price, so the net price will be $103.87 per share. What is the cost of the p..

Compact fluorescent lamps-break-even cost : Compact fluorescent lamps (CFLs) have become required in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent lightbulb costs $.35 and lasts for 1,000 hours. If you require a 9 percent return, at what cost per kilowa..

What is depreciation tax shield : What is the depreciation tax shield?

Requires initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.46 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..

User Account

All Pages