1. Coppell Timber Company had total earnings last year of $5,000,000, but expects
totalearnings to drop to $4,750,000 this year because of a slump in the housing industry.
Thereare currently 1,000,000 shares of common stock outstanding. The company has
Unit 3 Essay Exam
3. Toto and Associates preferred stock is selling for $27.50 a share. The firm nets $25.60 after 3.
issuance costs. The stock pays an annual dividend of $3.00 per share. What is the cost of
existing, and new, preferred stock respectively
Unit 4 Essay Exam
3. Worthington, Inc. is planning to issue $7,500,000 in 120-day maturity notes carrying a rate of
11 percent per year. Worthingtons commercial paper will be placed at a cost of $35,000. What is
the effective cost of credit to Worthington
Unit 2 - Question#2: You want to invest in bonds. Examine whether or not each provision listed
will make the bonds more or less desirable as an investment: call provision, convertible bond
provision, subordinated debt.
A Call Provision can be attractive t