1) Ott Transportation Corp can issue perpetual preferred stock at a price of $88 a...
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Finance
1) Ott Transportation Corp can issue perpetual preferred stock at a price of $88 a share with an annual dividend of $4.00 a share. Ignoring flotation costs, what is the companys cost of preferred stock rPS?
A. 4.55%
B. 4.00%
C. 44.00%
D. 46.25%
2) In the after cost of debt formula, what rate would you use for the cost of debt for a firm with 8% outstanding coupon bonds and a yield to maturity of 6.5%?
A. 6.5%
B. 8.0%
C. 2.5%
D. 14.5%
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