St. Joe Trucking has sold an issue of $6 cumulative preferred stock to the public at aprice of $60 per share. After issuance costs, St. Joe netted $57 per share. The companyhas a marginal tax rate of 40 percent.a. Calculate the after-tax cost of this preferred stock offering assuming that thisstock is a perpetuity.•b. if the stock is callable in 5 years at $66 per share and investors expect it to becalled at that time, what is the after-tax cost of this preferred stock offering?(Compute to the nearest whole percent.)

St. Joe Trucking has sold an issue of $6 cumulative preferred stock to the public at aprice of $60 per share. After issuance costs, St. Joe netted $57 per share. The companyhas a marginal tax…

 

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Joe wants to set one lump sum of money aside today to pay for his child’s college education, which will occur in 15 years and cost $50,000. If the current 15 year interest rate is 7%, then how much does Joe need to set aside today?

a. $18,122

b. $137,952

c. $3,333

d. $18,797

 

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Joetta Hernandez is a single parent with two children and earns ​$35,000 a year. Her​ employer’s group life insurance policy would pay 2.5 times her salary. She also has

​$46,667 saved in a​ 401(k) plan, ​$3,889 in mutual​ funds, and a $2,333 CD. She wants to purchase term life insurance for 15 years until her youngest child is​ self-supporting. She is not concerned about her outstanding​ mortgage, as the children would live with her sister in the event of​ Joetta’s death. Assuming she can receive a

55 percent​ after-tax, after-inflation return on insurance​ proceeds, use the earnings multiple method to calculate her insurance need. How much more insurance does Joetta need to​ buy? What other information would you need to know to use the needs approach to calculate​ Joetta’s insurance​ coverage?  

.

Assuming she can receive a 55 percent​ after-tax, after-inflation return on insurance proceeds and using the earnings multiple​ method, Joetta’s insurance need is

​$_________?

 

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Joey read in his biology book that fish

activity increases with water temperature, and he

decided to investigate this issue by conducting

an experiment. On nine successive days, he

measured fish activity and water temperature in

his aquarium. He found the equation of the

LSRL to be yˆ =152.1+ 37.65t , where yˆ is the

predicted amount of activity. If one of Joey’s

days had a water temperature of 69.0 degrees

Fahrenheit and the fish activity on that day was

265, what is the residual activity for this

particular temperature?

 

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