Question

J&J foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100...

J&J foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100 a share. The company has determined that stocks with similar characteristics provide a return of 8.2 percent. what should the offer price be?
a. $61.38
b. $64.20
c. $69.27
d.$67.26
e. $65.85

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
J&J foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • J&J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100...

    J&J Foods wants to issue 5.4 percent preferred stock with a stated liquidating value of $100 a share. The company has determined that stocks with similar characteristics provide a return of 8.2 percent. What should the offer price be?

  • Suppose the XYZ Co. wants to sell preferred stock at $70 per share. A similar issue...

    Suppose the XYZ Co. wants to sell preferred stock at $70 per share. A similar issue of preferred stock already outstanding has a price of $50 per share and offers a dividend of $1 every quarter. What dividend will XYZ Co. have to offer if the preferred stock is going to sell? $1.0 per share $1.2 per share $1.4 per share $1.8 per share $2.0 per share

  • 38 Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently...

    38 Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers an annual return to investors of 15.0%. The company wants the stock to sell for $689.00 per share. What annual dividend must the company offer? $149.03 $4,593.33 $114.72 $103.35 $4,239.65

  • Crane Company is authorized to issue 8000 shares of 7%, $100 par value preferred stock and...

    Crane Company is authorized to issue 8000 shares of 7%, $100 par value preferred stock and 450000 shares of no-par common stock with a stated value of $1 per share. If Crane issues 4000 shares of preferred stock for land with an asking price of $565000 and a market value of $540000, which of the following would be the journal entry for Crane to record? Land 540000 Preferred Stock Paid-in Capital in Excess of Par-Preferred 400000 140000 Land 400000 Preferred...

  • stock price? 11. Valuing Preferred Stock. E-Eyes.com has a new issue of preferred stock it calle...

    stock price? 11. Valuing Preferred Stock. E-Eyes.com has a new issue of preferred stock it calle 20/20 preferred. The stock will pay a $20 dividend per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should you pay today? 12. Stock Valuation. Alexander Corp. will pay a dividend of $2.72 next year. The company has stated that it will maintain a constant...

  • Coronado Company is authorized to issue 9000 shares of 9%, $100 par value preferred stock and...

    Coronado Company is authorized to issue 9000 shares of 9%, $100 par value preferred stock and 522000 shares of no-par common stock with a stated value of $1 per share. If Coronado issues 4500 shares of preferred stock for land with an asking price of $571000 and a market value of $547000, which of the following would be the journal entry for Coronado to record? (a) Land 571000 Preferred Stock 450000 Paid-in Capital in Excess of Par-Preferred 121000 (b) Land...

  • 2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50...

    2. North Pole Air has an issue of preferred stock outstanding that pays dividends of $8.50 annually. The par value of each preferred share is $100. Investors require a 12.25 percent rate of return on this stock. The next annual dividend is due tomorrow. What should the current market price be? [Hint: This problem has a little twist!]

  • What is the value of a preferred stock when the dividend rate is 16 percent on a $75 par value?

    Problem 8-1(Preferred stock valuation) What is the value of a preferred stock when the dividend rate is 16 percent on a $75 par value? The appropriate discount rate for a stock of this risk level is 14 percent. The value of the preferred stock is _______ . (Round to the nearest cent.)(Preferred stock valuation) The preferred stock of Gandt Corporation pays a $0.50 dividend. What is the value of the stock if your required return is 11 percent? The value of the...

  • What would be the expected rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 9 p...

    What would be the expected rate of return on a perpetual preferred stock with a $100 par value, a stated dividend of 9 percent of par, and a current market price of $70? a. 9.00% b. 12.86% c. 12.02% d. 6.30% e. 14.19%

  • Crane Company is authorized to issue 8000 shares of 7%, $100 par value preferred stock and 450000 shares of no-par comm...

    Crane Company is authorized to issue 8000 shares of 7%, $100 par value preferred stock and 450000 shares of no-par common stock with a stated value of $1 per share. If Crane issues 4000 shares of preferred stock for land with an asking price of $565000 and a market value of $540000, which of the following would be the journal entry for Crane to record? 400000 400000 Land Preferred Stock Land Preferred Stock 540000 540000 O Land 540000 Preferred Stock...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT