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1. Burnwood Tech plans to issue some $60 par preferred stock with a 7% dividend. A similar stock is selling on the market for $57. Burnwood must pay flotation costs of 5% of the issue price. What is the cost of the preferred stock?
2. You are planning to save for retirement over the next 15 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 5 percent. When you retire, you will combine your money into an account with a 7 percent return.
Required:
How much can you withdraw each month from your account assuming a 20-year withdrawal period?(Do not round your intermediate calculations.)
a. $2,882.56
b. $188,275.77
c. $34,590.7
d. $2,940.21
e. $2,824.91
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