Question
F.E 17. A company's perpetual preferred stock will be issued for $95 per share, and pays an annual dividend of $6. In issuing the preferred
F.E
17. A company's perpetual preferred stock will be issued for $95 per share, and pays an annual dividend of $6. In issuing the preferred shares, the company incurs flotation costs of 2%. How much is the cost of capital for the preferred stock? Answer as a percentage to the nearest hundredth as in xx.xx recalling that for two place percentage accuracy, your rate accuracy should be to four places. Hint: With a flotation cost, the firm will be obtaining less than the full price per share!
18. Calculate the total present value of the following three cash flows: $13 obtained one year from today, $24 obtained two years from today, and $30 obtained three years from today. Use 6.8% as the interest rate. Answer to the nearest cent, xxx.xx and enter without the dollar sign.
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