A firm has a Rs. 100 par value preferred stock and it has 50,000 number of preferred stocks? Its pays Rs. 3 as a quarterly perpetual dividend and yield to investor is 12%. If the firm wants to issue new preferred stock the floatation cost would be 10%. What is the value weight of preferred stock when firm finances, given debt financing is 88.12 million and equity financing is 60 million? (expected time 3 minutes)

A firm has a Rs. 100 par value preferred stock and it has 50,000 number of preferred stocks? Its pays Rs. 3 as a quarterly perpetual dividend and yield to investor is 12%. If the firm wants to issue new preferred stock the floatation cost would be 10%. What is the value weight of preferred stock when firm finances, given debt financing is 88.12 million and equity financing is 60 million? (expected time 3 minutes)

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Description: A firm has a Rs. 100 par value preferred stock and it has 50,000 number of preferred stocks? Its pays Rs. 3 as a quarterly perpetual dividend and yield to investor is 12%. If the firm wants to issue new preferred stock the floatation cost would be 10

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 19P

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