1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lelu [443]
4 years ago
7

CV preferred stock has a par value equal to $100 per share and pays an annual dividend equal to 8% of the par value. If investor

s require a 10 percent return to purchase CV’s preferred stock, what is the stock’s market value?
Business
1 answer:
iris [78.8K]4 years ago
5 0

Answer:

The stock's market value per share is $80.

Explanation:

The preferred stock is just like a perpetuity as it has an indefinite life and pays a constant dividend/ cash flow through out. The formula for the value or current price of a perpetuity is,

V or P0 = Cash flow or Dividend  /  required rate of return

In this case, the dividend per share is paid at 8% of par value. Thus, dividend per share is 100 * 0.08 = $8 per share.

The required rate of return is 10%.

The current price or market value of this stock is,

V or P0 = 8 / 0.1  = $80

You might be interested in
jermey owns his own business and has excellent management skills. he is very detail oriented, organized, knows how to follow a s
Shtirlitz [24]

Answer:

Jeremy should consider hiring an experienced and creative marketing team. Every product is brought into the market through the efforts of the market team. It is the responsibility of the sales and marketing team to carry out market analysis and come with creative ideas to reach the target market.

For Jeremy to increase sales and his connection with the customer base, he needs to work on establishing a sales and marketing department whose sole focus would be to convert his plans into effective actions.

6 0
3 years ago
X Company must purchase a new delivery truck and is using the payback method to evaluate two possible trucks. Truck 1 costs $31,
Lady_Fox [76]

Answer:

C: 4

Explanation:

The computation of the payback period is shown below:

Incremental investment in truck 2 is

= $44,000 - $31,000

= $13,000

Now

Year        Cash saving in cost    Cumulative

1                   -$1,000                    -$1,000

2                  $4,000                      $3,000

3                  $5,000                      $8,000

4                 $5,000                       $13,000

5                  $3,000                      $16,000

6                 $3,000                       $19,000

7                 $2,000                        $21,000

7 0
3 years ago
"Tourism sector has become a good source of earning foreign currency in Nepal"Justify this statement with examples
olchik [2.2K]

Explanation:

Tourism has become one of the main income sources for many developing countries like Nepal. Nepal has great potential to become a top destination for tourists as the nation is famous for its snowcapped mountains, abundant flora and fauna, exciting trekking routes and rich cultural and religious diversity.

5 0
3 years ago
Read 2 more answers
Money that has value because the government has ordered that it is an acceptable means to pay debts is referred to as
vfiekz [6]

Answer:

Fiat money is the answer

Explanation:

7 0
3 years ago
Distinguish between economic and accounting profit
Masja [62]

Answer:

The main difference between accounting and economic Profit is that accounting profit refers to monetary revenue minus monetary costs which includes any type of cost in the organization in the form of rents, salaries, material costs etc. Economic profit refers to the monetary revenue minus total cost.

Explanation:

8 0
2 years ago
Read 2 more answers
Other questions:
  • A CDS with a notional principal of $100 million the reference entity defaults.What is the payoff to the buyer of protection when
    10·1 answer
  • Phishing is looking for and reporting online scams.<br><br> True or <br> False
    15·2 answers
  • A company purchased 100 units for $30 each on january 31. it purchased 400 units for $20 each on february 28. it sold a total of
    5·1 answer
  • Home Value Inc., Max Cart Inc., and Nice Necessities Inc. are three consumer-product retailing companies. Their products consist
    15·1 answer
  • Consider a mutual fund with $300 million in assets at the start of the year and 12 million shares outstanding. If the gross retu
    14·1 answer
  • If you want to use Format Painter to apply formatting to many different selections, what can you do to make this happen more eff
    11·2 answers
  • During the current month, a company that uses a job order cost accounting system purchases $50,000 in raw materials for cash. It
    5·1 answer
  • Match each type of insurance with an example of when the insurance
    13·1 answer
  • 10. Ahron Company makes 8,000 units per year of a part it uses in the products it manufactures. The unit product cost of this pa
    8·1 answer
  • The seeds of a financial crisis are often sown when an economy , an event known as?
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!