A Firm Has $3 Million Market Value and It Sells

question 102

Multiple Choice

A firm has $3 million market value and it sells preferred stock with a par value of $100. If the coupon rate on the preferred stock is 8% and the preferred stock trades at $92, what is the cost of preferred stock capital?

• A) 8.26%
• B) 8.70%
• C) 9.13%
• D) 9.57%

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Definitions:

More Difficult Tasks

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Some Competence

A reference to possessing a certain level of ability or knowledge in a specific area.

Low Commitment

Refers to minimal or lackluster emotional or intellectual dedication by an individual towards their job or organization.

SLII Model

A situational leadership theory that proposes different leadership styles based on the maturity level of the followers.