Preferred Class of StockYou are the president of an internet company that has en
ID: 2734847 • Letter: P
Question
Preferred Class of StockYou are the president of an internet company that has enjoyed great success. You are considering expanding operations into the South American markets and need to raise $500 million of additional funding to do so. You are considering borrowing the money in the bond market at a 6% rate or issuing an additional public offering of common stock. The company treasurer suggests an issuance of preferred stock instead.
What factors would you consider to decide the best way to raise the money?
(Please answer in a meaningful paragraph with good grammer and show sources thanks!)
Explanation / Answer
1.)first calculate the cost of capital for the both methods
2) present position of the company
3) select the best method based on EPS also.
4) also consider the other macro and micro business environment factors