A firm has issued $5 par value preferred stock that pays a $0.80 annual dividend. The...
A firm has issued $5 par value preferred stock that pays a $0.80 annual dividend. The stock currently sells for $9.50. In calculating WACC, what should one use for the value of the firm's preferred stock?
Please do not use excel, show all work if possible!
Homework Answers
Par value = $5
Annual dividend = $0.80
Price = $9.50
Cost of preferred stock = Annual dividend / Price
Cost of preferred stock = $0.80 / $9.50 = 0.10526
Cost of preferred stock = 10.526%
Value of firm preferred stock used in computation of WACC = Market price of preferred stock = $9.50
So, Value of the firm's preferred stock = $9.50
So, Answer is $9.50
Add Answer to:
A firm has issued $5 par value preferred stock that pays a $0.80
annual dividend. The...
A preferred stock has a par value of $110 and pays an annual dividend of 5%...
A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar investments have an annual rate of return of 3%, what is the current value of this preferred stock? (round to nearest cent) The answer is $183.33 but please show work how to get answer, preferably how to find it in excel.
A preferred stock has a par value of $110 and pays an annual dividend of 5%...
A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar investments have an annual rate of return of 3%, what is the current value of this preferred stock? (round to nearest cent). Can you please show me how to do this. ThanK You!!!
A firm has a 5% dividend preferred stock with a par value of $25 issued and...
A firm has a 5% dividend preferred stock with a par value of $25 issued and outstanding. The stock is selling for $22 in the market today. The flotation costs of new preferreds are $1. If the firm is to issue new preferred shares at par to fund a portion of its new capital expenditures, what is the component cost of preferred stock for the company?
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17....
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
6. AOK preferred stock pays an annual dividend of $6.50. What is the rate of return...
6. AOK preferred stock pays an annual dividend of $6.50. What is the rate of return if the stock currently sells for $73.03 per share? 8.90% Please Show All Work
Skyler Industries's preferred stock currently sells for $48 per share. The stock pays an annual dividend...
Skyler Industries's preferred stock currently sells for $48 per share. The stock pays an annual dividend of $3.29 per share. The cost of preferred stock, Rp, is ____%. Round your final answer to 2 decimal places (example: enter 12.34 for 12.34%), but do not round any intermediate work in the process. [Note: Correct answer feedback may show more than 2 decimal places, but you should still follow instructions above for entering your answers.]
9.7/9.8 Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields...
9.7/9.8
Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? $ Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its...
An issue of preferred stock pays an annual dividend of $4.29 while the firm's preferred shareholders...
An issue of preferred stock pays an annual dividend of $4.29 while the firm's preferred shareholders require an 8.1% return. The value of this firm is closest to: a. $43.82 b. $52.96 c. $58.03 d. $62.73
Afirm's preferred stock pays an annual dividend of $6, and the stock sells for $85. Flotation...
Afirm's preferred stock pays an annual dividend of $6, and the stock sells for $85. Flotation costs for new issuances of preferred stock are 7% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 33%? (Round your answer to 2 decimal places.) Multiple Choice Ο Ο Ο Ο ο ο ο ο
Bostwick Company's perpetual preferred stock sells for $85 per share, and it pays an $8.10 annual...
Bostwick Company's perpetual preferred stock sells for $85 per share, and it pays an $8.10 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the weighted average cost of capital (WACC)? Your answer should be between 7.20 and 11.52, rounded to 2 decimal places, with no special characters.
ZZZ-Best, Inc. recently issued $65 par value preferred stock that pays an annual dividend of $17. If the stock is currently selling for $76, what is the expected return of this preferred stock? 22.37% 22.94% 0 24.42% O 20.27% O 22.60% Your broker has recommended that you purchase stock in National Bank & Trust, Inc. National Bank & Trust recently paid its annual dividend of $5. Dividends have consistently grown at a rate of 3.1%. Based on your analysis, you...
9.7/9.8
Earley Corporation issued perpetual preferred stock with a 12% annual dividend. The stock currently yields 7%, and its par value is $100. Round your answers to the nearest cent. a. What is the stock's value? b. Suppose interest rates rise and pull the preferred stock's yield up to 14%. What is its new market value? $ Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its...
An issue of preferred stock pays an annual dividend of $4.29 while the firm's preferred shareholders require an 8.1% return. The value of this firm is closest to: a. $43.82 b. $52.96 c. $58.03 d. $62.73
Afirm's preferred stock pays an annual dividend of $6, and the stock sells for $85. Flotation costs for new issuances of preferred stock are 7% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 33%? (Round your answer to 2 decimal places.) Multiple Choice Ο Ο Ο Ο ο ο ο ο
Bostwick Company's perpetual preferred stock sells for $85 per share, and it pays an $8.10 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the weighted average cost of capital (WACC)? Your answer should be between 7.20 and 11.52, rounded to 2 decimal places, with no special characters.
Most questions answered within 3 hours.
-
List and compare different forms of passive transport and active
transport.
asked 1 minute ago -
In Netherland Dwarf rabbits, dwarf size is determined by allele
N, and normal-size by allele n....
asked 8 minutes ago -
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as...
asked 22 minutes ago -
Consider testing the
hypotheses:
H0: p = 0.56
H1: p > 0.56
where p is
the...
asked 25 minutes ago -
In a two-factor analysis of variance a main effect is defined as
____.
a. the unique...
asked 33 minutes ago -
A bank's loan officer rates applicants for credit. The ratings
are normally distributed with a mean...
asked 33 minutes ago -
Fill in the following information for Adipic Acid: molecular
weight, g or ml, mole, melting point,...
asked 39 minutes ago -
how
to use a for loop to iterate over the string below and print each
character...
asked 41 minutes ago -
Please type answer, Thanks.
Respond to the following in a minimum of 175
words:
Research industry...
asked 40 minutes ago -
Assume that all interest rates in the economy increase from 9
percent to 10 percent. Which...
asked 50 minutes ago -
Describe the function of a Change Control Board.
When calculating Planned Value (PV), what is the...
asked 56 minutes ago -
The customer help center in your company receives calls from
customers who need help with some...
asked 1 hour ago