The treasurer of Kelly Bottling Company (a corporation) currently has $100,000 invested in preferred stock yielding 8 percent.

1. The treasurer of Kelly Bottling Company (a corporation) currently has $100,000 invested in preferred stock yielding 8 percent. He appreciates the tax advantages of preferred stock and is considering buying $100,000 more with borrowed funds. The cost of the borrowed funds is 10 percent. He suggests this proposal to his board of directors. They are somewhat concerned by the fact that the treasurer will be paying 2 percent more for funds than the company will be carning on the investment. Kelly Bottling is in a 34 percent tax bracket, with dividends taxed at 15 percent.a). Compute the amount of the aftertax income from the additional preferred stock if it is purchased(Round your answer to 2 decimal places. Omit the "$" sign from your response).b).Compute the aftertax borrowing cost to purchase the additional preferred stock. That is, multiply the interest cost times (1 – T).(Round your answer to 2 decimal places. Omit the "$" sign from your response.)2. Mr. Michaels controls proxies for 38,000 of the 70,000 outstanding shares of Northern Airlines. Mr. Baker heads a dissident group that controls the remaining 32,000 shares. There are seven board members to be elected and cumulative voting rules apply. Michaels does not understand cumulative voting and plans to cast 100,000 of his 266,000 (38,000 × 7) votes for his brother-in-law, Scott. His remaining votes will be spread evenly for three other candidates.How many directors can Baker elect if Michaels acts as described above? Use logical numerical analysis rather than a set formula to answer the question. Baker has 224,000 votes (32,000 × 7).

1. The treasurer of Kelly Bottling Company (a corporation) currently has $100,000 invested in preferred stock yielding 8 percent. He appreciates the tax advantages of preferred stock and is...