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Galina-37 [17]
3 years ago
11

Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $2.85 dividend every year, in perpetuity. If thi

s issue currently sells for $77.32 per share, what is the required return?
Business
1 answer:
nikdorinn [45]3 years ago
7 0

Answer:

3.69%

Explanation:

The formula to compute the required rate of return is shown below:

=  (Annual dividend per year) ÷ (Current selling price per share) × 100

= ($2.85) ÷ ($77.32) × 100

= 3.69%

We simply divide the annual dividend per year with the current selling price per share and then multiply it by  percentage, so that the required rate of return can come in percentage

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A new security system has a price-tag of $8,000, but should save your company $3,600 each year for the next 10 years in reduced
tensa zangetsu [6.8K]

If the required rate of return is 7.2%, no such security shall be purchased.

<h3>What does the required rate of return mean?</h3>

The required rate of return is the expected percentage of returns on investment at the time the investment is made. The required rate of return, in this case, is 7.2%.

The actual returns earned from purchasing the security for $8000 and receiving returns of $3600 are calculated to be around a 3.6% return.

As a result, if the required rate of return on investment is 7.2%, the security should not be purchased.

Read more about the required rate of return here:

brainly.com/question/13987385

#SPJ4

3 0
1 year ago
Norman Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service lif
ArbitrLikvidat [17]

Answer:

2019 = 2750

2020 = 5500

Explanation:

Given that:

Cost of truck = $36000

Salvage value = $3000

Useful life = 120, 000 miles

(Cost of asset - salvage value) / useful life

(36000 - 3000) / 120,000 = 0.275

2019 : 0.275 x 10,000 = 2750

2020 : 0.275 * 20000 = 5500

3 0
2 years ago
At UPS, a 12-step process prescribes how drivers should park their trucks, locate the package they are about to deliver, and ste
Alla [95]

Answer:

Programmed decision making

Explanation:

A programmed decision is one that is done by following already laid down rules and procedures. They are Carried out using formal patterns and the goals here are both clear and specific. These rules and routines in UPS are are a good example of how programmed decisions are done. As it can be seen on every aspect of their day to day business activities.

8 0
3 years ago
Pluto Company owns 100 percent of the capital stock of both Saturn Corporation and Sol Corporation. Saturn purchases merchandise
likoan [24]

Answer:

The amount that should be eliminated from cost of goods sold in the combined income statement for 20X8 is $31,250.

Explanation:

Amount eliminated from cost of goods sold in the combined income statement for year 2008.

saturn purchase merchandise from Venus at 125 % of sol cost.

sol sold inventory to saturn for $ 25,000

Amount should be eliminated from combined income statement

=  $25,000*125/100

= $31,250

Therefore, The amount that should be eliminated from cost of goods sold in the combined income statement for 20X8 is $31,250.

4 0
3 years ago
JDD Corporation provides the following benefits to its employee, Ahmed (age 57): Salary $ 307,000 Health insurance 15,400 Dental
Vesna [10]

Answer:

His after-tax benefit of receiving each of these benefits are as follows:

After-tax benefits of taxable items = $410,292

Non taxable benefits:

Health insurance = $15,400

Dental insurance = $4,800

Non taxable premium = $830

Dependent care = $4,500

Professional dues = $1,400

Explanation:

Life insurance = 4,200

Group-term life insurance coverage = $253,00

Amount of premium exempted from tax by law =$50,000

Non taxable premium = (Amount of premium exempted from tax by law / Group-term life insurance coverage) * Life insurance = ($50,000 / $253,000) * 4,200 = $830

Taxable premium = Life insurance - Non taxable premium = $4,200 - $830 = $3,370

Therefore, we have:

Taxable benefits = Salary + Personal use of company jet + Taxable premium = $307,000 + $293,000 + $3,370 = $603,370

Income tax on benefits = Taxable benefits * Marginal tax rate = $603,370 * 32% = $193,078

After-tax benefits of taxable items = Taxable benefits - Income tax on benefits = $603,370 - $193,078 = $410,292

Therefore, his after-tax benefit of receiving each of these benefits are as follows:

After-tax benefits of taxable items = $410,292

Non taxable benefits:

Health insurance = $15,400

Dental insurance = $4,800

Non taxable premium = $830

Dependent care = $4,500

Professional dues = $1,400

6 0
3 years ago
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