1. Grill Works and More has 7 percent preferred stock outstanding that is currently selling for $49 a share. The market rate of return is 14 percent and the firm's tax rate is 37 percent. What is the firm's cost of preferred stock? Select one: a. 13.29 percent b. 14.54 percent c. 14.29 percent d. 13.67 percent e. 13.77 percent

2. Which one of the following statements concerning dilution is correct? Select one: a. Dilution of percentage ownership occurs whenever an investor participates in a rights offer. b. Market value dilution increases as the net present value of a project increases. c. Market value dilution occurs when the net present value of a project is negative. d. Neither book value dilution nor market value dilution has any direct bearing on individual shareholders. e. Book value dilution is the cause of market value dilution.

3. A.K. Stevenson wants to raise $7.5 million through a rights offering. The subscription price is set at $24. Currently, the company has 2.1 million shares outstanding with a current market price of $25 a share. Each shareholder will receive one right for each share of stock they currently own. How many rights will be needed to purchase one new share of stock in this offering? Select one: a. 7.00 rights b. 6.67 rights c. 6.87 rights d. 6.72 rights e. 6.40 rights

4. Shelf registration allows a firm to register multiple issues at one time with the SEC and then sell those registered shares anytime during the subsequent: Select one: a. 6 months. b. 2 years. c. 180 days. d. 5 years. e. 3 months.

5. Miller Mfg. is analyzing a proposed project. The company expects to sell 8,000 units, plus or minus 2 percent. The expected variable cost per unit is $11 and the expected fixed costs are $287,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $68,000. The tax rate is 32 percent. The sales price is estimated at $64 a unit, plus or minus 3 percent. What is the earnings before interest and taxes under the base case scenario? Select one: a. $58,480 b. $69,000 c. $114,920 d. $46,920 e. $93,160