Answer:
<h2>
a. The Preferred stock is noncumulative.</h2>
Preferred stock
= 7,710 * 17.5 * 8%
= $10,794
Per share
= 10,794/7,710
= $1.40
Common Shareholders.
= 63,800 - 10,794
= $53,006
Per share
= 53,006/49,000
= $1.08
<h2>
b. Preferred stock is cumulative. </h2>
This means that if preferred dividends are not paid in a year, they will be accrued and paid when they can.
Preferred stock
= 7,710 * 3 years (2017,2018,2019)
= $23,130
Per share = 23,130/7,710
= $3
Common stock
= 63,800 - 23,130
= $40,670
Per share
= 40,670/49,000
= $0.83
c. Why were the dividends per share of common stock less for the cumulative preferred stock than the noncumulative preferred stock?
b. The dividends in arrears on the preferred stock had to be fulfilled before dividends could be paid for the current year.
Answer:
individuals will tend to become free riders, and private firms will have difficulty generating enough revenue to produce an efficient quantity of the good.
Explanation:
A public good is a good that is non excludable and non rivalrous. Everyone has assess to the statue and because one person is enjoying the view of the statue does not means another person cannot enjoy the view of the statue
The free rider problem is a form of market failure. It occurs when people benefit from a good or service of communal nature and do not pay to enjoy these services.
Because a public good is non-excludable, the problem of free rider increases so private firms would be unable to generate adequate revenue
Answer:
3.5%
Explanation:
We will apply asset pricing model to calculate cost of equity (required rate of return). The capital asset pricing model is stated as below:
Cost of equity = Risk-free rate + Beta x Market risk premium
Putting all the number together, we have:
Cost of equity (Beale) = 5.5% + 1.8 x (9% - 5.5%) = 11.8%
Cost of equity (Foley) = 5.5% + 0.8 x (9% - 5.5%) = 8.3%
Cost of equity (Beale) - Cost of equity (Foley) = 11.8% - 8.3% = 3.5%
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<em>Note: You can also do quick calculation as below:</em>
<em>Cost of equity (Beale) - Cost of equity (Foley) = (Beta of Beale - Bete of Foley) x Market risk premium = (1.8 - 0.8) x (9% - 5.5%) = 3.5%</em>
Answer:
True
Explanation:
International trade is trade across national boundaries and it includes the import and export of goods and services. An economic prosperity is synonymous with rising incomes and it would increase the propensity to import; that is, people in the domestic economy now have more incomes to spend on imports. Alternatively, a recession would lead to a fall in incomes and imports, and also a fall in investment which conseqeuntly reduces exports volumes.
Trade restrictions (protectionism) such as tariffs, quotas, competitive devaluation, administrative complexities, export subsidy hinder free trade and they could reduce the volume of imports into a country. This is because trade restrictions would make imports to be more expensive; the aim might be that the government is trying to correct a current account deficit. However, the effectiveness of trade restrictions in reducing import volumes and influening export is dependent on the price elasiticty of demand for imports and exports, the quality of a country's good or service, and how the country's rate of inflation compares with that of other countries.
