The information is reliable, I believe. (As the question states the investment company is reputable, which is pretty much a synonym for reliable, so it can't be unreliable.)
Answer:
Option (A) is correct.
Explanation:
Total dividends = $45,000 (Paid in 2010 and 2011)
common stock outstanding = 20,000 shares
Preferred dividend:
= No. of shares × Par value × 5%
= 5,000 × $100 × 5%
= $25,000
Dividends received by the common stockholders in 2011:
= Total dividends - Preferred dividend
= ($45,000 × 2) - ($25,000 × 3)
= $90,000 - $75,000
= $15,000
Answer: 49,010.5263
Explanation: Add 45'000, 4,000, 10,divided by 95%
Answer:
The correct answer is letter "D": interest being earned on previously-earned interest.
Explanation:
Compounding, also called "<em>interest on interest</em>", refers to a method of calculating interest based on the principal of a capital gain plus interest that was already accrued. It is a form of reinvestment based on accumulated interest. Compound interest could be computed by day, month or year.
