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Nataliya [291]
3 years ago
6

The ZZZ Corporation has preferred stock. The preferred stock pays a dividend per share every year of $6.50. The stock sells for

$81.25 per share. TRUE or FALSE: The required return of investors in the stock is 8%.
Business
2 answers:
defon3 years ago
8 0

Answer:

True

Explanation:

The statement is true because according to dividend growth method the price of the given preferred stock is $81.25.

Formula to calculate the prce of share using Dividend growth method is

Price of share = D0 / (Rate of return - Growth rate)

In case of preferred stock a stable dividend is paid and there is no growth in the dividend payment.

so

Price of share = D0 / (Rate of return - 0)

Price of share = D0 / Rate of return

Share price = $6.5 /  0.08

Share Price = $81.25

Furkat [3]3 years ago
8 0

Answer:

The answer to the question is<em> YES</em>

Explanation:

What is Return on Investment (ROI)?

Return on investment (ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. It is most commonly measured as net income divided by the original capital cost of the investment. The higher the ratio, the greater the benefit earned.

Therefore, the formula to find the Return on Investment for the question - The ZZZ Corporation has preferred stock. The preferred stock pays a dividend per share every year of $6.50. The stock sells for $81.25 per share. TRUE or FALSE: The required return of investors in the stock is 8%.

ROI = Net Profit ÷ Total Investment x 100

∴ $6.50 = Net Profit (Yearly Dividend par share);

   $81.25 = Total Investment (Market Price of the stock);

Applying the formula: 6.50/81.25 x 100 =7.97≅ 8% (approximately)

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vichka [17]

Answer:

Gap management is a strategy which every business follows. A business can be successful only if it sets goals for its future.

Explanation:

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tatyana61 [14]

Answer:

2040.

Explanation:

To reach the total manufacturing cost we need to calculate machining and assembling overhead rate first, in order to calculate the rate we need to divide manufacturing overhead cost on number of hours

Machining OH rate = 280000 / 50000 = 5.60  

Assembling OH rate = 360000/40000 = 9.00

 

manufacturing cost:    

                    machine Assembly Total  

Material  425                175             600  

labor               275                300             575  

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5 0
3 years ago
Abercombie Inc. will invest in a project. The project will give the company $10,000 on January 1, 2014, $23,000 on May 8, 2014,
Gala2k [10]

Answer:

$136,539.57

Explanation:

The present value of the project can be determined by using the cfj function of a Financial calculator as follows :

$0 CF0

$10,000 CF 1

$23,000 CF2

$33,000 CF3

$42,000 CF4

$55,000 CF5

I/YR = 5 %

Then SHIFT NPV gives $136,539.57

therefore,

the present value of the project is $136,539.57

5 0
2 years ago
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