What is the company cost of preferred stock

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Reference no: EM132064578

1. Your best friend, who is in 30% Marginal tax Bracket, has decided to buy a home for $ 380,000 in the Worcester County by making a down payment of 15% and financing the balance at a fixed rate 5.75% over 30 years. He needs your help in figuring out the actual monthly Payments (per Month Mortgage Pmts – per month Tax Savings) for the first year.

A- $1507.06

B- $1397.07

C- $1995.82

2. Francesca Co sold new preferred stock for $98.50 per share. The preferred stock pays an $7.50 annual dividend. There is also a flotation cost of 3.00%. What is the company's cost of preferred stock?

a. 7.85%

b. 9.44%

c. 10.22%

d. 9.82%

e. 8.72%

Reference no: EM132064578

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