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NEW QUESTION: 1
A preferred stock is sold for $101 per share, has a face value of $100 per share, underwriting fees of $5
per share, and annual dividends of $10 per share. If the tax rate is 40 percent, the cost of funds (capital)
for the preferred stock is:
A. 4.2 percent.
B. 10.4 percent.
C. 6.2 percent.
D. 10.0 percent.
Answer: B
Explanation:
Choice "d" is correct. The stock is issued for a net of $96 per share ($101 less $5 underwriting fee).
Because preferred stock dividends are not tax deductible, the cost to the company is $10/share (the tax
rate is a distractor). Therefore, the cost of the preferred stock is:
Choices "a", "b", and "c" are incorrect, per the above Explanation:/calculation.
NEW QUESTION: 2
If the Project Board are too busy to authorize all change requests themselves they can appoint?
A. A Change Authority
B. A Change Committee
C. A Change Budget
D. A Change Board
Answer: B
NEW QUESTION: 3
Which of the following is an advantage of outsourcing?
A. Continuity is guaranteed
B. Cost savings may be made
C. Core competence may be strengthened
D. Data confidentiality is stengthened
Answer: B