At what price per share will preferred stock be offered

Reference no: EM131314295

the O.K. Railroad needs to raise $9.5 million for capital improvements. One possibility is a new preferred stock issue - 8 percent dividend, $100 par value - stock that would yield 9 percent to investors. Flotation costs for an issue this size amount to 5 percent of the total amount of preferred stock sold. These costs are deducted from gross proceeds in determining the net proceeds to the company. (Ignore any tax considerations.)

a. At what price per share will the preferred stock be offered to investors? (Assume that the issue will never be called.)

b. How many shares must be issued to raise $9.5 million for the O.K. Railroad?

Reference no: EM131314295

Questions Cloud

What is the value of sample correlation coefficient : Do you believe the estimated regression equation would provide a good prediction of the number of shares of option grants outstanding? Use r2 to support your answer.

How the stakeholder benefits from the organization : In a well-written paper, determine and examine the healthcare stakeholders (both internal and external) for an acute care hospital. You should specifically address how the stakeholder benefits from the organization and the organization's responsib..

Compute the upward force on the device from water and air : Compute the upward force on the device from water and air. Use the results of Problem as well as any other data given in that problem that you may need.

Identified an investment project with the cash flow : Zevon Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,310 2 1,270 3 1,600 4 1,960. What is the present value at 16 percent? what is the present value of these cash flows?

At what price per share will preferred stock be offered : Flotation costs for an issue this size amount to 5 percent of the total amount of preferred stock sold. These costs are deducted from gross proceeds in determining the net proceeds to the company. (Ignore any tax considerations.)

Draw a circuit diagram for boolean function : Construct a truth table and find the minimized Boolean function to implement the logic telling the director when to hire. Draw a circuit diagram for the Boolean function.

Bonds mature if the current value of the bonds : Regatta, Inc., has bonds outstanding that pay an 8.250 percent coupon rate on a $1,000 face value. Investors buying the bond today can expect to earn a yield to maturity of 6.875 percent. How many years until the bonds mature if the current value of ..

What is the required throat diameter : What is the required throat diameter if this flow is to give a reading of 0.10 m of alcohol in a differential manometer connected to the inlet and the throat?

Opportunity costs-what is the irr of an investment : Opportunity costs. What is the IRR of an investment that cost $150,000 and has OCF of $30,000 dollars a year for 2 years and $48,000 for the next three years?

User Account

All Pages