What is the cost of the preferred stock

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Reference no: EM131836805

1. Burnwood Tech plans to issue some $60 par preferred stock with a 7% dividend. A similar stock is selling on the market for $57. Burnwood must pay flotation costs of 5% of the issue price. What is the cost of the preferred stock?

2. You are planning to save for retirement over the next 15 years. To do this, you will invest $700 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 9 percent, and the bond account will pay 5 percent. When you retire, you will combine your money into an account with a 7 percent return.

Required:

How much can you withdraw each month from your account assuming a 20-year withdrawal period?(Do not round your intermediate calculations.)

a. $2,882.56

b. $188,275.77

c. $34,590.7

d. $2,940.21

e. $2,824.91

Reference no: EM131836805

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