Answer:
(a) $51.92
(b) She will face a loss of $7.66
Explanation:
(a) Market Value of Preferred Stock:
= Dividend ÷ Required Return
= $5.40 ÷ 10.4%
= $51.92
(b) If she sells the stock when the required return on similar-risk preferred stocks has risen to 12.2%.
Market value of the securities:
= $5.40 ÷ 12.2%
= $44.26
therefore,
Market value of the securities - Market Value of Preferred Stock
= $44.26 - $51.92
= $7.66
She will face a loss of $7.66
Answer:
The correct answer is option D.
Explanation:
The efficient market hypothesis is a theory in modern financial economics which states that the share prices reflect all available information and alpha generation is impossible. Neither fundamental nor technical analysis can give excess returns which are also risk-free.
Share prices in an efficient market reflect all the information, both public and private. This information includes future predictions. All this information is widely available to all the investors and they correctly interpret this information and quickly adjust to it.
Answer:C. on a single-step income statement.
Explanation:A single-step income statement is a type of statement that lists all expenses in a single column,there is no separate column for the different types of costs. All the costs such as such as Operating and non-operating costs and cost of goods sold are all reported in a single column.
THIS TYPE OF INCOME STATEMENT IS USUALLY UTILIZED BY SMALL SCALE BUSINESS ORGANISATIONS SUCH AS SOLE PROPRIETOR AND PARTNERSHIP.
Answer:
$0
Explanation:
Amount paid by the customer for 100 preferred stock = 100 * $100 = $10,000
Number of preferred stock when converted to common stock = 100 * 2 = 200 shares
Revenue from selling the 200 shares = 200 * $50 = $10,000
Profit or loss to customer = Revenue from selling the 200 shares - Amount paid by the customer for 100 preferred stock = $10,000 - $10,000 = $0
Therefore, the customer made no profit nor loss.
