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1. How much would $5,000 due in 25 years be worth today if the discount rate were 5.0%?

a. $1,476.52

b. $1,124.16

c. $1,183.33

d. $1,245.61

e. $1,311.17

2. Bosio Inc.'s perpetual preferred stock sells for $97.50 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. 8.72%

b. 9.08%

c. 9.44%

d. 9.82%

e. 10.22%

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91605675

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