5. Novomix Inc. pays its preferred stockholders a dividend of $1.75 every year. The current price of one of their preferred shares is $35.30. Novomix pays 21% in corporate tax. What is the cost of its preferred shares? a) 15.66% b) 19.83% c4.96% 3.92%
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- You are given the following information for Lighting Power Company. Assume the company's tax rate is 21 percent. Debt: Common stock: Preferred stock: 24,000 shares of 4.8 percent preferred stock outstanding, a $100 par value, currently selling for $93 per share. 5 percent market risk premium and 5.3 percent risk-free rate. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Market: 21,000 7 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 108 percent of par; the bonds make semiannual payments. WACC 540,000 shares outstanding, selling for $72 per share; the beta is 1.18. %Fantana Company’s preferred stock currently sells for $100.00 per share, and it pays an $6.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 6.00% of the issue price. The company's tax rate is 32%. What is Fantana Company's cost of preferred stock? 6.72% 6.53% 6.88% 7.12% 6.38%11. On January 1, a shareholder purchased 81 shares of stock in Beta company for $115 per share. On August 20, the company paid an $8 dividend per share. On December 31, the shareholder sold all the shares for $113 per share. What is the overall Economic Rate of Return for this investment? a. 8.70% b. 6.96% c. 5.22% d. 5.31%
- Last year ABC Co made profits before tax of $2,628,000. Tax amounted to $788,000. ABC Co's share capital was $2,000,000 (2,000,000 shares of $1) and $4,000,000 6% preference shares. What was the earnings per share (EPS) for the year? A 31c B 80c C 92c D 119cBosio Inc.'s perpetual preferred stock sells for $71.65 per share, and it pays an $6.03 annual dividend. What is the company's cost of preferred stock for use in calculating the WACC? Show 2 decimals in your answer. E.g . 9.99 %.a) Ex-Dividend Price Company A has declared a dividend of $2.60 per share. Suppose capital gains are not taxed but dividends are taxed at 15 percent. New IRS regulations require that taxes be withheld at the time the dividend is paid. The stock closed at $36.80 per share today and the stock goes ex dividend tomorrow. What will be the ex-dividend price? b) Market value and homemade dividends An investor own 100 shares of Firm X. The company will pay 0.50 per share this year and final liquating dividend of $42 per share next year. The required return of this stock is 14%. Ignoring taxes, what is the current market value of one share of this stock? What will the investor's homemade dividend per share be next year if they do not want any dividend this year? (hint: buy shares with the dividends this year)
- Schuss Inc. can sell preferred shares for $64 with an estimated flotation cost of $3.00. The preferred stock is anticipated to pay $5 per share in dividends. a. Compute the cost of preferred stock for Schuss Inc. (Round the final answer to 2 decimal places.) Cost of preferred stock % b. Do we need to make a tax adjustment for the issuing firm? multiple choice Yes NoYou buy stock for $30 per share and sell it for $33 per share after holding it for slightly after a yer and collecting a $0.75 per share dividend. Youre ordinary income tax rate is 28% and your capital gains tax rate is 20%. Youre after tax return rate is? A. 8.00% B. 10.25% C. 12.5% D. 9.8% E.8.75%22. Garnean Inc. issued $50,000 in common share dividends. Its net income for the year was $250,000. What is Garnean's dividend payout ratio? a.0.2 b.0.5 c.2.5 d.5
- Stout Inc.'s perpetual preferred stock sells for $65.00 per share, and it pays an $8.50 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 4.00% of the price paid by investors. What is the company's cost of preferred stock for use in calculating the WACC? a. 10.39% b. 13.62% c. 14.40% d. 14.28% e. 11.81%Your firm's preferred stock pays a dividend of $5.77 per year. The current price of the preferred stock is $82.19. Your firm's tax rate is 32%. What is your firm's cost of preferred stock? The firm's cost of preferred stock is (Enter the answer in decimal form. Round to two decimal places.Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $14 per share, and sells for $70. The corporate tax rate is 21%. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.) Cost of preferred stock %