Convertible bonds are one type of hybrid security

Assume there is an interim year-to-date operating loss and a potential tax benefit associated with this loss. Which of the following is true? a. The year-to-date loss is completely deductible at year end

b. The benefit associated with a year-to-date loss should be recognized if it is expected to be realized during the year and the benefit is recognizable as a deferred tax asset at the end of the year. c. No interim year-to-date losses can be carried back against any prior year's income. d. A current year-to-date interim loss may not be offset entirely by income in later interim periods of the current fiscal year.

Use the dividend growth or Gordon model to develop the cost of retained earnings if last year's dividend was $2.25, the anticipated constant growth rate is 5% the stock's selling price today is $36 per share, and flotation costs are estimated to be 11%?

A) 15.3% B) 11.6% C) 10.9% D) 14.9%