1. Your best friend, who is in 30% Marginal tax Bracket, has decided to buy a home for $ 380,000 in the Worcester County by making a down payment of 15% and financing the balance at a fixed rate 5.75% over 30 years. He needs your help in figuring out the actual monthly Payments (per Month Mortgage Pmts – per month Tax Savings) for the first year.
A- $1507.06
B- $1397.07
C- $1995.82
2. Francesca Co sold new preferred stock for $98.50 per share. The preferred stock pays an $7.50 annual dividend. There is also a flotation cost of 3.00%. What is the company's cost of preferred stock?
a. 7.85%
b. 9.44%
c. 10.22%
d. 9.82%
e. 8.72%