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Vika [28.1K]
3 years ago
9

Western auto inc. pays a​ $1.77 preferred dividend every quarter and will maintain this policy forever. what price should you pa

y for one share of preferred stock if you want an annual return of​ 9.25% on your​ investment?
a. ​$74.54
Business
1 answer:
zhuklara [117]3 years ago
7 0
The answer is $76.54  Let us use 3 months as our period. Thus, we restate the annual required rate of9.25% as a quarterly (or three-month) rate of  = 2.3125% (or 0.023125).  Applying the constant dividend model with infinite horizon and with the  quarterly rate of return and a quarterly dividend of $1.77, we get:  = $76.54<span>.

Price of Preferred Stock = Dividend / required return of rate - growth rate</span>
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An online savings account _____. offers lower interest rates because it costs more money to maintain the online site offers high
sveta [45]
Your answer would be they offer Higher interest rates.
5 0
2 years ago
Read 2 more answers
The following are the assets and liabilities of Jill Carlson Realty​ Company, as of January ​31, 2018. Also included are​ revenu
pogonyaev

<u>Complete Question:</u>

Apply the accounting equation; construct a balance sheet) The following are the assets and liabilities of Jill Carlson Realty Company, as of January 31, 2018. Also included are revenue, expense, and selected stockholders' equity figures for the year ended on that date (amounts in millions):

Complete Table is in the attachment given at the end of the answer.

Requirement 1.

Construct the balance sheet of Jill Carlson Realty Company at January 31, 2018. Use the accounting equation to compute ending retained earnings.

<h2>Answer:</h2>

Balance Sheet of Jill Carlson Realty​ Company, as of January ​31, 2018

<h2><u>ASSETS</u></h2>

Current Assets

Cash                                                                          $57.2

Receivables                                                              $0.5

Non Current Assets

Investment Assets                                                     $79.4

Property, Plant and Equipment                                 $1.6

Other Assets                                                          <u>    $9.3    </u>

Total Assets                                                           <u>    $148    </u>

<h2><u>LIABILITIES</u></h2>

Current Liabilities                                                      $2.9

Non Current Liabilities                                          <u>   </u><u>$102.6</u>

Total Liabilities                                                       <u>   $105.5 </u>

<u>EQUITY</u>

Common Stock                                                           $39.2

Closing Retained Earnings (Step1)                         <u>    $3.3   </u>

Total Equity                                                             <u>     $42.5</u>

<u></u>

<u>Step 1: Find Closing Retained Earnings</u>

As we know that:

Closing Retained Earnings = Total Assets - Total Liabilities - Common Stock

Here

Total Assets is $148 million

Total liabilities is $105.5 million

Common Stock is $39.2 million

By putting these values in the above equation, we have:

Closing Retained Earnings = $148 million  -  $105.5 million  -  $39.2 million

Closing Retained Earnings = <u>$3.3 million</u>

7 0
3 years ago
Huck Finn is thinking about purchasing some stock in Mississippi Mining Company (MMC). Huck uses the price/earnings ratio techni
musickatia [10]

Answer:

Profit earning ratio of MMC = 10%

Explanation:

Given:

Current stock price = $100

Yearly profit on each share = $10

Profit earning ratio (P\E ratio) =?

Computation of profit earning ratio:

Profit earning ratio (P\E ratio) = Current stock price / Yearly profit on each share

Profit earning ratio (P\E ratio) = $100 / $10

Profit earning ratio (P\E ratio) = 10

It is computed that MMC's Profit earning ratio is nearer to the industry averages P/E ratio so, the investor can wait for some time to purchase this stock.

4 0
3 years ago
Record the following transactions of Fronke’s Fashions in a general journal assuming that they use the periodic system.
Mrrafil [7]

Explanation:

The Journal entry is given below:-

1. Purchase Dr,                       $1,280

         To cash                                      $1,280

(being merchandise is purchased)

2. Cash Dr,                                 $115

         To Purchase return                    $115

(Being merchandise is returned)

3. Purchase Dr,                           $668

    Freight In Dr,                          $43

           To Account payable                 $771

(being Purchase on credit)

4. Account payable                     $50

            To Purchase return                   $50

(Being purchase return is recorded)

5. Account payable                      $661

         To cash                                         $661

(Being cash is paid)

3 0
3 years ago
In 2002, a Swedish home electrical appliance manufacturer decided to use the same advertising message wherever it advertised aro
ella [17]

Answer:

Global advertising

Explanation:

Global advertising -

It refers to the method of popularizing a specific goods or services to the whole world , is referred to as global advertising .

Only specific companies or business are able to advertise their products on the global platform and earn some profit .

The example are -

Microsoft , Coca cola , McDonald's etc .

Hence , from the given scenario of the question ,

The correct answer is Global advertising .

7 0
3 years ago
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