1. A silver mining company has used futures markets to hedge the price it will receive for everything it will produce over the next 5 years. What could happen to the company if silver prices double over the next year?
2. Grill Works and More has 9 percent preferred stock outstanding that is currently selling for $43 a share. The market rate of return is 13 percent and the firm's tax rate is 33 percent. What is the firm's cost of preferred stock?
12.56 percent
17.20 percent
13.81 percent
19.02 percent
20.93 percent