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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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Five thousand bonds with a face value of $1000 each, are sold at 110. The entry to record the issuance is
Contact [7]

Answer:

Date, bonds sold at a premium

Dr Cash 5,500,000

    Cr Bonds payable 5,000,000

    Cr Premium on bonds payable 500,000

Explanation:

The total face value of the bonds is $1,000 x 5,000 bonds = $5,000,000

since the bonds were sold at 110, their price was $5,000,000 x 110% = $5,500,000

the difference between the face value and the actual market price = $5,500,000 - $5,000,000 = $500,000 must be recorded as premium on bonds payable (increases the bonds' carrying value)

4 0
3 years ago
A vendor has learned that, by pricing caramel apples at $1.25, sales will reach 111 caramel apples per day. Raising the price to
Wittaler [7]

Solution:

Slope = y2 - y1 / x2 -x1

slope = 81 - 111 / $2.00 - $1.25

slope = -30/$0.75

So every $0.75 increase causes a decrease of 30 sales.

So the rise over run or slope of the line is -30/0.75 = -40/1

Start forming the equation:

y = mx + b

y = -40x + b

Substitute one of the points to find the y-intercept:

81 = -40(2) + b

Isolate for the y-intercept:

b = 161

So,

y = -40x + 161

7 0
3 years ago
You bought a new car for $23,500. You put down $5,000 cash and have to take a loan out to pay for the rest. The car dealership i
Vanyuwa [196]

Answer:

$4,507.73

Explanation:

5 0
3 years ago
Step 1 of 12 In this lesson you will shop to find the best car that you can afford and figure out whether leasing or an outright
Scorpion4ik [409]

To know if it is better to rent a car or buy it according to a person's income, it is necessary to evaluate different factors.

The first factor that a person must take into account to compare whether it is better to buy a car or rent it is the income that he receives each month. For example:

  • If a person receives $ 800 a month, his income is low, making it impossible for him to buy or rent a car for a long time.

  • On the other hand, if a person receives $ 4,000 a month, he has the facility to buy or rent a car according to her/his preference. Some people prefer to rent a car because they do not have to spend money on repairs and other expenses, while other people prefer to buy it to have it for a long time and have it available all the time.

This situation varies according to other factors such as the purchase value of the car, the monthly rental value, the value of the repairs, the value of the fuel, among others.

Note: This question is incomplete because it does not have the complete information.

Learn more in: brainly.com/question/25442731

8 0
2 years ago
Economic theory offers ____________________ about the full range of possible events and responses, which can prevent ___________
Xelga [282]

Answer: The correct answer is "B".

Explanation: Economic theory offers "<u>a systematic way of thinking"</u> about the full range of possible events and responses, which can prevent <u>"misguided conclusion"</u> about how households will respond to changes in prices or incomes.

5 0
3 years ago
Read 2 more answers
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