A Firm Has Determined It Can Issue Preferred Stock at $115

question 66

Multiple Choice

A firm has determined it can issue preferred stock at $115 per share par value. The stock will pay a $12 annual dividend. The cost of issuing and selling the stock is $3 per share. The cost of the preferred stock is ________.

• A) 6.4 percent.
• B) 10.4 percent.
• C) 10.7 percent.
• D) 12 percent.

---

Definitions:

Unconditioned Stimulus

In classical conditioning, a stimulus that unconditionally, naturally, and automatically triggers a response without prior conditioning.

Emotional Responses

The reactions or feelings that are generated in response to stimuli, events, or thoughts, influenced by an individual's psychological state or temperament.

John Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the importance of observable behaviors and discounting the importance of mental states.

Observational Learning

The process of learning behaviors, skills, or attitudes by watching and imitating others.