Jones Distributing Corp

question 17

Multiple Choice

Jones Distributing Corp.can sell common stock for $27 per share and its investors require a 17% return.However,the administrative or flotation costs associated with selling the stock amount to $2.70 per share.What is the cost of capital for Jones Distributing if the corporation raises money by selling common stock?

• A) 27.00%
• B) 18.89%
• C) 18.33%
• D) 17.00%

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Definitions:

Planaria

A genus of flatworms, which are often used in scientific studies due to their remarkable regenerative abilities.

Deuterostomes

A classification of animals that includes humans, characterized by the development of the anus from the first opening in the embryo.

Embryonic Development

In humans, the first 2 months of development following fertilization, during which the major organs are formed.

Radial Cleavage

A type of embryonic development in certain animals where cell divisions occur at right angles to one another, typical in deuterostomes.