Answer:
Today, the investment is worth $31,997.29
Explanation:
Giving the following information:
An investment offers $5,900 per year for 15 years, with the first payment occurring one year from now. The required return is 6 percent
First, we need to calculate the final value, using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual pay= 5,900
n= 15
i= 0.06
FV= {5,900*[(1.06^15)-1]} / 0.06= $137,328.22
Now, we can determine the present value:
PV= FV/ (1+i)^n
PV= 137,328.22/ 1.06^25= $31,997.29
Answer:
The total amounts payable to preferred stockholders and common stockholders, respectively, are: $480,000 and $320,000.
Explanation:
Cumulative preferred stock has the dominant right over common stocks in term of receiving cash dividend.
The dividend paid to preferred stock per year is: 100 x 20,000 x 8% = $160,000 and the company owed investor 03 years of dividend ( 2016,2017,2018) with the dividend payable amounted to 160,000 x 3 = $480,000.
The dividend paid to common stock is the left over, after paying to preferred stock holders, which is calculated as $800,000 - $480,000 = $320,000.
So, The total amounts payable to preferred stockholders and common stockholders, respectively, are: $480,000 and $320,000.
Answer:
There is a difference between theory and practice because the theory states <u><em>with taxes implies that firms should issue maximum debt</em></u><em> </em>but in practice, <u><em>this does not occur because it will result in bankruptcy if firms are issuing maximum debt.</em></u><em> </em>There should be a balance between how much debt is acquired and how much equity is taken. Therefore bankruptcy becomes a cause of concern if maximum debt is issued.
Answer:
104.50
Explanation:
11 × 5 = 55
11 × 1.5 (time and a half) = 49.50
55 + 49.50 = 104.50
have a good day :)
Shoemaker Corporation Journal Entries
1. April 01, 2021
Dr Notes receivable 600,000
Cr Cash600,000
2. December 31,2021
Dr Interest receivable 42,075
Cr Interest revenue 42,075
3. April 01, 2019
Dr Cash 566,100
Cr Notes receivable 510,000
Cr Interest receivable 42,075
CrInterest revenue 14,025
Workings:
2.Interest revenue: $510,000 × 11% × 9/12 = $42,075
3.Interest revenue: $510,000 × 11% × 3/12 = $14,025
42,075+ 14,025=56,100
510,000+ 56,100= 566,100
