Answer:
Option A is the better choice of the two given any positive rate of return.
Explanation:
True, you can use a formula in Excel spreadsheet!
Answer:
6.45%
Explanation:
Calculation for bank's cost of preferred stock
Using this formula
Cost of preferred stock = Dividend / Price of Stock * 100
Where,
Dividend $6
Price of Stock 93 per share
Let plug in the formula
Cost of preferred stock =6/93*100
Cost of preferred stock= 0.0645*100
Cost of preferred stock=6.45 %
Therefore the bank's cost of preferred stock will be 6.45%
Answer:
14.48%
Explanation:
The capital gains yield on the investment is increase in share price divided by the initial price paid to acquire the share a year ago.
The total return formula can be used to figure the price the stock was when sold as below:
total return =P1-Po+D/Po
P1 is the current price which is unknown
Po is the initial price of $67.67
total return is 18.79%
D is the dividend of $2.92
0.1879=P1-67.67+2.92/67.67
0.1879*67.67=P1-64.75
12.72=P1-64.75
P1=12.72+64.75
P1=77.47
Capital gains yield=(77.47
-67.67)/67.67=14.48%
