Wildhorse Hand Trucks has a preferred share issue outstanding that pays a dividend of $1.30 per year. The current cost of preferred equity for Wildhorse is 10.50 percent. If Wildhorse issues additional preferred shares that pay exactly the same dividend and the investment banker retains 7.50 percent of the sale price. What is the cost of the new preferred shares for Wildhorse? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.) Cost of new preferred shares for Wildhorse: %

Wildhorse Hand Trucks has a preferred share issue outstanding that pays a dividend of $1.30 per year. The current cost of preferred equity for Wildhorse is 10.50 percent. If Wildhorse issues additional preferred shares that pay exactly the same dividend and the investment banker retains 7.50 percent of the sale price. What is the cost of the new preferred shares for Wildhorse? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.) Cost of new preferred shares for Wildhorse: %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.00 dividend every year, in perpetuity. If this issue currently sells for $80.10 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return
Fegley, Incorporated, has an issue of preferred stock outstanding that pays a $5.80 dividend every year, in perpetuity. If this issue currently sells for $80.50 per share, what is the required return? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Required return %
Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.30 dividend every year, in perpetuity. If this issue currently sells for $80.25 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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es Fegley, Incorporated, has an issue of preferred stock outstanding that pays a $6.10 dividend every year, in perpetuity. If this issue currently sells for $80.65 per share, what is the required return? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Required return %
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ABC Inc.’s perpetual preferred stock sells for $56 per share, and it pays an $9 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $4 per share. What is the company’s cost of preferred stock for use in calculating the WACC?
Stout Inc.'s perpetual preferred stock sells for $65.00 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? a. 10.39% b. 13.62% c. 14.40% d. 14.28% e. 11.81%
ABC Inc.’s perpetual preferred stock sells for $56 per share, and it pays an $9 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of $4 per share. What is the company’s cost of preferred stock for use in calculating the WACC?Note: Enter your answer rounded off to two decimal points.Do not enter % in the answer box. For example, if your answer is 0.12345 thenenter as 12.35 in the answer box.
XYZ issued a series of preference share that currently pay dividend of $4.55 per share in perpetuity. What is the current market price of XYZ shares if required rate of return is 11% p.a.
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