1. A firm has $ 3 million market value and it sells preferred stock with a par value of $100. If the coupon rate on the preferred stock is 9% and the preferred stock trades at $85, what is the cost of preferred stock financing?
A.11.65%
B. 10.59%
C. 10.06%
D. 11.12%
2. A firm reports that in a certain year it has a net income of $4.3 million, depreciation expenses of $2.9 million, capital expenditures of $2.4 million, and Net Working Capital decreased by $1.3 million. What is the firm's free cash flow of that year?
A. $3.5 million
B. $5.1 million
C. $10.9 million
D. $ 6.1 million