Answer:
The company's cost of preferred stock is 5.1%
Explanation:
In order to find the cost of the preferred stock we will need to divide the dividend the company pays on it by the net amount that the company is receiving for selling it.
In order to find the dividend we will multiply 9% by the par value of 20
Dividend = 0.09*20=1.8
Now we need to find the net amount the company receives for selling the preferred stock.
The company sells the stock for $40 but also has a issuing cost of $5, so in order to find the net amount we will subtract the cost from the price.
40-5= 35
35 is the net amount the company receives.
Now we will divide the the dividend 1.8 by the net amount 35
1.8/35=0.051
=5.1%
The company's cost of preferred stock is 5.1%
Set savings and debt payoff goals
Answer:
a) salary $112,000
Interest income $2,200
Capital gain on stock -
gross income $114,200
capital gains and losses
capital gain 10,500
capital loss 15,300
Net capital loss = 4800
net loss offset on Gross income = 3000
Net Gross income $111,200
capital loss that is carried forward = $1800
b) salary $112,000
Interest income $2,200
Capital gain on stock -
gross income $114,200
CAPITAL LOSSES/GAINS
capital gain 16000
capital loss 15300
Net Capital gain = 700
ADD taxable capital gains on Gross income
c) salary $112,000
Interest income $2,200
gross income $114,200
capital losses/ gains
capital loss 15300
capital loss 17000
Total Capital LOSS = $ 32300
Set off against income = (3000)
Losses carried forward =$29300
Explanation:
Capital losses can be offset on normal Gross income but only up to $3000 per year
