If the Beta Company Issues $100 Million Worth of Preferred

question 105

Multiple Choice

If the Beta company issues $100 million worth of preferred stock,what will happen to its net worth if book value of common equity is $500 million?

• A) It will increase by $400 million.
• B) It will decrease by $100 million.
• C) It will increase to $600 million.
• D) It will decrease to $400 million.

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