TSL has beta of 1.2, priced at $30 per share outstanding. The company has 10 million shares of common stock. TSL also issues $20 million in preferred stock priced at $10 per share; with $1.50 annual preferred dividend. TSL has $30 million of debt, with cost of debt 3%.

With total aftertax return, divided among priority of capital providers, of 20%, is TSL creating value for its common shareholders?

Answer rating: 100% (QA)

No based on the information provided TSL is not creating value for its common shareholders Heres why ... View the full answer