1. Taylor Systems has just issued preferred stock. The stock has a 11% annual dividend and a $ 110 par value and was sold at $104.50 per share. In addition, flotation costs of $9.90 per share were paid. Calculate the cost of the preferred stock.
2. Explain the mechanics of stock option trading. What puts and calls are? Explain different strategies such as spreads, collars, etc. Describe a scenario where a private investor might find option trading to be a beneficial investment strategy