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Kobotan [32]
3 years ago
7

Diggin Tools just issued new preferred stock, which sold for $85 in the stock markets. Holders of the stock will receive an annu

al dividend equal to $9.35. The flotation costs associated with the new issue were 6 percent and Diggin's marginal tax rate is 30 percent. Which of the following is the component cost of preferred stock, rps? (Round off the answer to two decimal places,
a. 11.05 percent
b. 10.75 percent
c. 11.70 percent
d. 10.52 percent
e. 12.25 percent
Business
1 answer:
lys-0071 [83]3 years ago
3 0

Answer:

c. 11.70 percent

Explanation:

The computation of the cost of preferred stock is shown below:

= Annual dividend ÷ Sale price of preferred stock × (1 - flotation cost)

= $9.35 ÷ $85 × (1 - 6%)

=  $9.35 ÷ $79.9

= 11.70%

We ignored the marginal tax rate i.e 30%. In the case of preferred stock, the flotation cost would be deducted. We consider all the things that are given in the question

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Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 ratio (in percents: Turner, 10%; Roth, 40%; and Lowe, 5
Sonbull [250]

Answer:

Turner, Roth, and Lowe

a. Loss from selling the assets = $78,800

b. Loss allocation to the partners:

                                                            Turner      Roth      Lowe

Loss sharing ($78,800)                      $7,880    $31,520   $39,400

c. Capital contribution to cover deficiency:

                                                            Turner      Roth      Lowe

Contribution to cover deficiency     $3,000    $12,000    $15,000

Explanation:

a) Data and Calculations:

                                                            Turner      Roth      Lowe

Income and loss sharing ratio:               1                4             5

Assets before liquidation = $130,800

Liabilities = $82,000  

Capital balances                                 $2,900   $14,200   $31,700

Cash received from sale of assets = $52,000 ($82,000 - $30,000)

Loss from sale of assets = $78,800 ($130,800 - $52,000)

Loss sharing ($78,800)                      $7,880    $31,520   $39,400

Contribution to cover deficiency       $3,000      $12,000   $15,000

5 0
2 years ago
The appraisal interview _______
Tomtit [17]

Answer:

The appraisal interview should be held in two segments because the rater must perform the role of both evaluator and counsellor.

Explanation:

Following are the purpose of appraisal interview:

1) Rate and evaluate the past performance.

2) Feedback for development and recommend the training program.

3) Discuss the growth plan of employee.

Therefore, role of one who is taking appraisal is very vital for the growth and development of employee. So, he has to play two role, both evaluator and counsellor.

6 0
3 years ago
Exercise 20-19 Budgeted cash payments LO P2 Zisk Co. purchases raw materials on account. Budgeted purchase amounts are: April, $
beks73 [17]

Answer:

See explanation section.

Explanation:

                                                    P2 Zisk Co.

                                      Budgeted cash payments

                                            For the 2nd quarter

                                                            April                   May                  June

Accounts payable                           $22,000

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Total budgeted cash for the 2nd quarter = $296,000.

30% in the month after purchase means 30% amount will be given in the following month.

8 0
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Setler79 [48]
The answer is a but I'm not really sure
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What is the economic purpose of market regulation?
LenKa [72]

Answer:

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4 0
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