Author Question: The preferred stock of Selena Corp. pays a dividend of 1.50 per share. If Selena preferred stock ... (Read 314 times)

krzymel · **on:** Jul 10, 2018

The preferred stock of Selena Corp. pays a dividend of 1.50 per share. If Selena preferred stock currently sells for 10 per share, the required rate of return is:

A) 15
B) 10
C) 7
D) 12
E) 14

Question 2

Assume that Federated Stores, whose credit card billings total 120 billion per year, were to
implement a lockbox arrangement that would speed up the collection of its credit card billings by 2
full days.

If Federated could earn 3.5 on its marketable securities, how much would the firm earn
per year from such a lockbox arrangement? Assume a 365-day year.
A) 316.99 million B) 183.50 million C) 230.14 million D) 244.58 million