Calculate the cost of common stock for a firm. The risk-free rate is 5%....
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Accounting
Calculate the cost of common stock for a firm.
The risk-free rate is 5%. Beta = 1.2. The rate of return on the market is 12%.
A. 13.4%
B. 12.8%
C. 12.2%
D. 11.8%
E. 11.3%
A firm recently issued a preferred stock at a market price of $80. It pays $2.50 per share in dividends. The corporate income tax rate is 25%. Find the cost of preferred stock to the firm if the floatation was 5% of the market price.
A. 3.2%
B. 2.7%
C. 2.9%
D.1.9%
E.None of he above
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