7-2: Company B Bugles has a preferred stock issue at a par value of $50 and an annual dividend of $4 per share. Other preferred stocks with similar risk are now earning a 7% annual rate of return. Compute the value of the preferred stock.

7-3: Your company has 3,400,000 shares outstanding. The company charter allows for up to 5,000,000shares of common stock. The sale of new common stock should net $50 per share. The company plans to raise $90,000,000 for new projects.

(A)How many shares (maximum) of additional new stock may the company sell under the current authorization?

(B)Assuming no new debt and only common stock to raise the funds, how many shares would the company need to sell to raise the new funds?

(C)Does the company have enough available shares to raise the required amount for new projects?