If investors require a 10% after-tax return from a firms preferred stock and its dividend is $5.00 per share, what is the price per share assuming a marginal tax rate of 25% and no flotation costs?

a. $20.00

b. $18.75

c. $12.50

d. $37.50

e. $50.00

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When evaluating a new project, the firm should consider all of the following factors EXCEPT

	a.	previous expenditures associated with a market testing.
	b.	the current market value of any equipment to be replaced.
	c.	changes in working capital attributable to the project.
	d.	the resulting difference in depreciation expense if the project involves replacement.