1. Why is Cost of Capital important in Corporations? Explain.
2. Preferred stock is selling for $30. The option allowing the company to buy back the stock for $29 is worth $1.30. How much is the convertible preferred stock?
3. Participating preferred pays $1.75 and 40% participation in common stock dividend growth. Common stock dividend in 2016 was $0.40 and in 2017 is 0.60. How much is the preferred stock’s dividend?