Author Question: Donnelly and Son pay $8 as the annual dividend on their preferred stock. Currently, this stock is ... (Read 31 times)

rayancarla1 · **on:** Apr 25, 2021

Question 1

Wilson's Cabinets has bonds outstanding that mature in eight years, have a 6 percent coupon and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,020. What is the company's pre-tax cost of debt?
◦ 5.68 percent
◦ 6.19 percent
◦ 6.34 percent
◦ 6.82 percent
◦ 7.57 percent

Question 2

Donnelly and Son pay $8 as the annual dividend on their preferred stock. Currently, this stock is selling for $72 a share. What is Donnelly's cost of preferred stock?
◦ 7.78 percent
◦ 9.00 percent
◦ 9.72 percent
◦ 11.11 percent
◦ 11.99 percent

Laurenleakan · **Reply #1 on:** Apr 25, 2021

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