1 Problem 9-8 2 3 4 Cost of preferred stock. Determine the cost for each of the following preferred stocks. Par value Sale price 5 6 7 Preferred stock A B D E $100 40 35 30 20 Flotation cost $9.00 $3.50 $4.00 $101 38 37 26 20 8 Annual dividend 11% 8% $5.00 $3.00 9% 9 5% of par $2.50 10 11 12 Solution 13 14 15 16 Stock A Par value Sale price Flotation cost Annual dividend Dividend payment Proceed from sale Cost of preferred stock $100 $101 $9.00 11% 17 18 19 20 21 Doblom na 23 24 25 Stock B Par value Sale price Flotation cost Annual dividend Dividend payment Proceed from sale Cost of preferred stock $40 $38 $3.50 8% 26 27 28 29 30 31 32 33 34 35 Stock C Par value Sale price Flotation cost Annual dividend Proceed from sale Cost of preferred stock $35 $37 $4.00 $5.00 36 37 38 39 40 41 42 Stock D Par value Sale price Flotation cost (% of par) Flotation cost Annual dividend $30 $26 5% 43 44 45 $3.00 Problem 9-8 45 $3.00 46 Annual dividend Proceed from sale Cost of preferred stock 47 48 49 50 51 Stock E Par value Sale price Flotation cost Annual dividend Dividend payment Proceed from sale Cost of preferred stock $20 $20 $2.50 9% 52 53 54 55 56 57 58 Points 1 60 1 59 Requirements 1 In cell E19, by using cell references to the given data, calculate the dividend payment of preferred stock A. 2 In cell E20, by using cell references to the given data, calculate the proceeds from sale of preferred stock A. 3 In cell E21, by using cell references to the given data, calculate the cost of preferred stock 4 In cell E28, by using cell references to the given data, calculate the dividend payment of preferred stock B. 61 62 1 1 63 Problem 9-8 58 Points 1 1 61 62 1 1 63 1 64 59 Requirements 1 In cell E19, by using cell references to the given data, calculate the dividend payment of 60 preferred stock A. 2 In cell E20, by using cell references to the given data, calculate the proceeds from sale of preferred stock A. 3 In cell E21, by using cell references to the given data, calculate the cost of preferred stock 4 In cell E28, by using cell references to the given data, calculate the dividend payment of preferred stock B. 5 In cell E29, by using cell references to the given data, calculate the proceeds from sale of preferred stock B. 6 In cell E30, by using cell references to the given data, calculate the cost of preferred stock 7 In cell E37, by using cell references to the given data, calculate the proceeds from sale of preferred stock C. 8 In cell E38, by using cell references to the given data, calculate the cost of preferred stock 9 In cell E44, by using cell references to the given data, calculate the flotation cost of preferred stock D. 10 In cell E46, by using cell references to the given data, calculate the proceeds from sale of preferred stock D. 70 11 In cell E47, by using cell references to the given data, calculate the cost of preferred stock 12 In cell E54, by using cell references to the given data, calculate the dividend payment of preferred stock E. 65 1 1 66 67 1 1 68 1 69 1 1 71 Problem 1 72 13 In cell E55, by using cell references to the given data, calculate the proceeds from sale of preferred stock E. 14 In cell E56, by using cell references to the given data, calculate the cost of preferred stock 15 Save the workbook. Close the workbook and then exit Excel. Submit the workbook as 73 1 0 74 75