Supposed a company has a preferred stock issue and a common stock issue. Both have just paid a $2 dividend. Do you think the price will be the same? Explain?
Cost of Preferred Stock XYZ Company plans to go for a Preferred Stock issue that pays $5 dividend; further, the stock can be sold for $60 per share. If the floatation cost is $4 per share, please calculate the cost of the preferred stock.
ABC Company used an investment bank to do IPO. In IPO, the company sold 32,494 shares at $65 each. The investment bank charged 6% spread. At the end of the 1st day of trading, ABC's stock price closed at $103. What is the indirect cost of the IPO to the company? Do not enter $ in the answer box.
ABC Company used an investment bank to do IPO. In IPO, the company sold 24,769 shares at $65 each. The investment bank charged 7% spread. At the end of the 1st day of trading, ABC's stock price closed at $81.66. What is the direct cost of the IPO to the company? Enter your answer rounded off two decimal points. Do not enter $ in the answer box.
14. (Cost of Preferred Stock) Your firm is planning to issue preferred stock. The stock sells for Rs120; however, if new stock is issued, the company would receive only Rs95. The par value of the stock is Rs100 and the dividend rate is 12 percent. What is the cost of capital for the stock to your firm?
why companies are anxious to go Public and issue a Initial Public Offering (IPO) to the public. What is the company trying to accomplish? During the IPO process why is it that companies going public seek to have TWO classes of stock where the Founders and Officers are able to buy stock from both offerings ?
what is r n (new common stock issue)?
what is r p (new preferred stock issue)?
what is r d (before tax rate on bonds)?
what is r i (after tax rate on bonds)?
what is r r (retained earnings)?
Company XYZ will pay in exactly one year $4 in dividends per share to its common stock shareholders. In exactly one year it will pay $2 in dividends per share to holders of its preferred stock. The flotation costs on...
what is r n (new common stock issue)? what is r p (new preferred stock issue)? what is r d (before tax rate on bonds)? what is r i (after tax rate on bonds)? -what is r r (retained earnings)? Company XYZ will pay in exactly one year $4 in dividends per share to its common stock shareholders. In exactly one year it will pay $2 in dividends per share to holders of its preferred stock. The flotation costs on...
1. Mr. White's company wants to issue new preferred stock. The preferred dividend is $3.21 per share and the stock can be sold for $31. If the flotation costs are $3, what is the company's cost of preferred stock, Kp? A) Less than 6%the time it takes to receive cash flows sufficient to cover your initial investment B) Between 6.00 and 10.00% C) Between 10.01% and 13% D) Greater than 13%
2. The Milton Company plans to issue preferred stock. Currently, the company's stock sells for $120. Once new stock is issued, the Milton Company would receive only $99 (due to flotation costs). The dividend rate is 12%, and the par value of the stock is $100. Compute the cost of capital of the stock to your firm. Show all work.