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Hi I need help answering these 5 question in the next 40min. I will give extra tip for every question you get right and answer
Hi I need help answering these 5 question in the next 40min. I will give extra tip for every question you get right and answer quickly.
QUESTION 1 1. Builtrite Auto has preferred stock shares outstanding that pay an annual dividend of $8 and are currently selling for $86 a share. What is the after-tax cost of preferred stock if the flotation cost for new shares is 5% and Builtrite is in the 34% marginal tax bracket? 6.46 % 7.31 % 4.82 % 9.79 % 1 points QUESTION 2 1. Builtrite Furniture is considering sells bonds for a plant expansion. Currently, Builtrite believes that it could sell 15 year maturity, $1000 par value, 5 3/4% coupon bonds after flotation costs for $985. If Builtrite is in the 34% marginal tax bracket, what is the after-tax cost for the bonds? 5.91 % 6.35 % 4.19 % 3.90 % 1 points QUESTION 3 1. Builtrite's common stock is currently selling for $56 a share and the firm just paid an annual dividend of $3.20 per share. Management believes that dividends and earnings should grow at 9% annually. Based on this, and a marginal tax rate of 34%, what is the cost of common stock (or cost of retained earnings)? 15.2 % 14.7 % 10.0 % 9.71 % 1 points QUESTION 4 1. Builtrite's common stock is currently selling for $48 a share and the firm just paid an annual dividend of $2.30 per share. Management believes that dividends and earnings should grow at 8% annually. Since new stock would need to be sold to finance an expansion, Builtrite expects flotation costs to be 5% of the expected selling price of $48 a share. Based on this, and a marginal tax rate of 34%, what is the cost of new common stock? 8.61 % 13.0 % 13.4 % 8.87 % 1 points QUESTION 5 1. Common stock is called a hybrid security because it takes on the attributes of both preferred stock and bonds. True False 1 points Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 Annual dividend CP Flotation Cost After tax 8 86 4.3 0.0979192166 6.46% 2 Npr FV Coupon PV Tax 15 1000 5.75% 985 34% Cost 5.90% After tax 3.90% 3P D0 g 56 3.2 9% r= 15.23% 4P D0 g 48 2.3 8% r= 13.45% 1 Annual dividend CP Flotation Cost After tax 8 86 4.3 0.0979192166 6.46% 2 Npr FV Coupon PV Tax 15 1000 5.75% 985 34% Cost 5.90% After tax 3.90% 3P D0 g 56 3.2 9% r= 15.23% 4P D0 g 48 2.3 8% r= 13.45%Step by Step Solution
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