Business, 02.11.2019 03:31 carson5238

Consider the case of purple lemon fruit company: ten years ago, purple lemon fruit company issued a perpetual preferred stock issue-called ps alpha-that pays a fixed dividend of $6.50 per share and currently sells for $100 per share. purple lemon's management team is considering issuing a second issue of perpetual preferred stock. if the new issue tentatively called ps beta-is actually sold, the company will incur an underwriting (or flotation) cost of 4.70%. in addition, the underwriters are anticipating the need to pay a dividend of $17.50 per share to attract new investors, and is expecting to sell the new shares for $95.00 per share as a component in purple lemon's weighted average cost of capital, ps alpha shares currently exhibit a cost of: 4.88% 8.13% o 7.48% 6.50%

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 20:30

What is the difference between a public and a private corporation?

Answers: 1

Answer

Business, 21.06.2019 20:40

Ail industries uses activity-based costing to assist management in setting prices for the company's three major product lines. the following information is available: activity cost pool estimated overhead expected use of cost driver per activity cutting $1,000,000 25,000 labor hours stitching 8,000,000 320,000 machine hours inspections 2,800,000 160,000 labor hours packing 960,000 64,000 finished goods units compute the activity-based overhead rates. (round answers to 2 decimal places, e.g. 12.25.)

Answers: 2

Answer

Business, 22.06.2019 11:20

Mae jong corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of $2 par value ordinary shares. the market rate of interest on similar bonds is 12%. interest is payable annually on december 31, and the bonds were issued for total proceeds of $1,000,000. in accounting for these bonds, mae jong corp. will: (a) first assign a value to the equity component, then determine the liability component. (b) assign no value to the equity component since the conversion privilege is not separable from the bond.(c) first assign a value to the liability component based on the face amount of the bond.(d) use the “with-and-without” method to value the compound instrument.

Answers: 3

Answer

Business, 22.06.2019 13:40

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.

Answers: 1

Answer

You know the right answer?

Consider the case of purple lemon fruit company: ten years ago, purple lemon fruit company issued a...

Questions