The preferred stock of Gator Industries sells for $34.65 and pays $2.79 per year in dividends….

| November 24, 2016

Question
The preferred stock of Gator Industries sells for $34.65 and pays $2.79 per year in dividends. What is the cost of preferred stock financing? If Gator were to issue 515,000 more preferred shares just like the ones it currently has outstanding, it could sell them for $34.65 a share but would incur flotation costs of $2.89 per share. What are the floatation costs for issuing the preferred shares and how should this cost be incorporated into the NPV of the project being financed?

Get a 30 % discount on an order above $ 5
Use the following coupon code:
CHRISTMAS
Order your essay today and save 30% with the discount code: CHRISTMASOrder Now
Positive SSL