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alexgriva [62]
3 years ago
15

Villalpando Winery wants to raise ​$35 million from the sale of preferred stock. If the winery wants to sell one million shares

of preferred​ stock, what annual dividend will it have to promise if investors demand a return of a. 12​%? b. 16​%? c. 8​%? d. 7​%? e. 6​%? f. 3​%? a. What annual dividend will it have to promise if investors demand a return of 12​%?
Business
1 answer:
statuscvo [17]3 years ago
8 0

Answer:

(a) $4.2

(b) $5.6

(c) $2.8

(d) $2.45

(e) $2.1

(f) $1.05

Explanation:

Given that,

Total amount of capital raised from the sale of preferred stock = $35 million

Number of shares = 1 million

Price per share = Total capital raised ÷ Number of shares

                          =  $35 million ÷ 1 million

                          = $35 per share

(a) If a Expected rate of return = 12 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.12

                            = $4.2

(b) If a Expected rate of return = 16 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.16

                            = $5.6

(c) If a Expected rate of return = 8 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.08

                            = $2.8

(d) If a Expected rate of return = 7 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.07

                            = $2.45

(e) If a Expected rate of return = 6 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.06

                            = $2.1

(f) If a Expected rate of return = 3 percent

Annual dividend = Price per share × Expected Rate of return

                            = $35 per share × 0.03

                            = $1.05

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2 years ago
Stellar Corporation engaged in the following cash transactions during 2017. Sale of land and building $194,800 Purchase of treas
Law Incorporation [45]

Answer:

The cash provided by investing activities is $91900

Explanation:

The net cash provided or (used) by investing activities is computed thus:

Sale of land and building                     $194800

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Net cash provided by investing activities $91900

The purchase of treasury refers to purchase of own shares from shareholders,hence it is a financing activity

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On January 1, 20X4, Polar Corp. paid $104,000 for $100,000 par value, 9% bonds of Seal Corp. Seal had issued $300,000 of the 10-
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Answer:

$14,000

Explanation:

Amount of interest expense = [(Bond issued by 'S' company x 9%) - Amount of    

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                                           =  (300,000 x 0.09) - 60000/10 x 200,000/300,000

                                          =  (27,000 - 6000) x 0.66667

                                          =  21,000 x 0.66667

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Jilk Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. Assuming that the fixed monthly expense
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Answer:

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