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NemiM [27]
3 years ago
10

International Imports (I2) pays an annual dividend rate of 10.40% on its preferred stock that currently returns 13.94% and has a

par value of $100.00 per share. What is the value of I2’s preferred stock? $100.00 per share $74.61 per share $111.91 per share $89.53 per share Suppose that due to high inflation, interest rates rise and pull the preferred stock’s yield to 18.12%. The value of the preferred stock will .
Business
1 answer:
skelet666 [1.2K]3 years ago
3 0

Answer:

$74.61 per share , decrease.

Explanation:

First calculate value of preferred share if return is  13.94% ;

Value of preferred share =(Annual dividend rate  * Par value)/ Rate of return

Value = (0.1040* 100)/0.1394

Value = 10.40/ 0.1394

Value = $74.61

Next, calculate value of preferred share if return is  18.12% ;

Value of preferred share =(Annual dividend rate  * Par value)/ Rate of return

Value = (0.1040* 100)/0.1812

Value = 10.40/ 0.1812

Value = $57.40

Since the value has gone from $74.61 to $57.40, it means that the value will DECREASE.

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Answer:

Debit Office Furniture account    $710

Credit Cash account                    $170

Credit Accounts payable             $710

Being entries to recognize office furniture partly paid for.

Explanation:

When items are purchased using cash, the corresponding credits in such transactions are recorded in the cash account. Where the item is purchased on account (or credit), the credit is posted to accounts payable.

Total worth of the office furniture = $170 + $540 = $710

The total debit for this will be recorded in the office furniture account.

Hence to recognize the transaction,

Debit Office Furniture account    $710

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Answer:

D) $45,000

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Exercise 15-2 On January 1, 2017, Klosterman Company issued $420,000, 12%, 10-year bonds at face value. Interest is payable annu
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The journal entry to record the bond issuance is shown below:

Explanation:

The journal entry to record the bond issuance is as:

Cash A/c.............................................Dr  $420,000

        Bonds Payable A/c......................Cr  $420,000

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