Answer:
9.47%
Explanation:
The computation of the cost of preferred stock is shown below:
Cost of preferred stock = Annual coupon ÷ Price of preferred stock per share
where,
Preferred stock sale price = 100 × 95% = $95
And, the annual coupon = 9% × 100 = $9
= $9 ÷ $95
= 9.47%
We assume the par value be 100
Simply we divide the annual coupon by the price of preferred stock per share so that the correct cost of
preferred stock can be computed
Answer:
The answer is: liquidating dividend should be $62.07.
Explanation:
Let denote the amount of liquidating dividend to be X => The present value of liquidating dividend amount is X/1.1^4; given discount rate is 10% and liquidating dividend will be paid in 4 year times.
We have:
Present value of regular dividend stream + Present value of liquidating dividend = Current share price
=> (2.4/10%) x [1 - 1.1^(-4) ] + X/1.1^4 = 50 <=> X/1.1^4 = $42.39 <=> X = 1.1^4 x 42.392 = $62.07.
So, The answer is: liquidating dividend should be $62.07.
Answer:
The value of the firm's common stock is $48
Explanation:
The constant dividend growth model is used to determine the market value of the share and which can be expressed as:
here;
the value of the current market price of the share (P) = unknown?
The dividend expected in the next year (D) = $2.40
The required rate of return (r) = 12% = 0.12
The growth rate (g) = 7& = 0.07
Replacing the values into the above equation:
P = $48
She should have had face to face conversation because in an email words can express many misinterpreted feelings, she should have asked to have a personal meeting in the email over her review
Answer:
45 degree line
Explanation:
In the equilibrium in income and expenditure model, expenditure equals national income when the expenditure crosses the 45 degree line. This means that in income and expenditure being at equilibrium, it means that there is no shift, change, deviation from the outcome.
Expenditure below and above 45 degree is not in equilibrium as that means that government income is either less than or greater than the expenditure respectively.
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