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NEW QUESTION: 1
The following information applies to a company's preferred stock:
Current price $105.00 per share
Par value $100.00 per share
Annual dividend $5.00 per share
The company issued the preferred stock at par and incurred a 10% floatation cost. If the company's marginal corporate tax rate is 40%, what is the after-tax cost of preferred stock?
A. 5.0%
B. 10.0%
C. 2.9%
D. 4.8%
E. 5.6%
F. 3.0%
Answer: E
Explanation:
Explanation/Reference:
Explanation:
The cost of preferred stock is calculated as the preferred stock dividend divided by the net issuing price.
The dividend for this preferred stock is $5.00, and the net issuing price was $90.00. Thus the cost of preferred stock is 5 divided by 90 or 5.6%. There are no tax savings associated with the use of preferred stock, therefore no tax adjustments are made when calculating the cost.
NEW QUESTION: 2
Which features are available when you create a sales forecast? (2 correct answers)
A. Multi-level overrides
B. Multi-dimensional rules
C. Multi-dimensional forecasting
D. Multi-level categorization
Answer: A,C
NEW QUESTION: 3
The best quality tool to use for gathering information about a specific problem is which of the following?
A. A stratification chart
B. A Pareto chart
C. An Ishikawa diagram
D. A histogram
Answer: C
Explanation:
Answer option B is correct.An Ishikawa diagram is an effective tool for organizing information about a problem when brainstorming with a group. A Pareto chart (C) graphically represents the 80/20 rule. A stratification chart (A) shows the individual components of a problem in addition to the total or summary. A histogram (D) provides a way of looking at random occurrences to find out if there is a pattern. Chapter: Human Resource Development Objective: Review Questions