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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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Monopolists want to protect their market position by – potential competitors. A common tactic is to lobby for –, such as –. Such
mixer [17]

Answer:

restricting the entry; trade restrictions; import tariffs; rent-seeking; monopoly

Explanation:

Monopolists want to maximize their profits by keeping the potential competitors out of the market. For restricting the entry of potential firms they adopt the practice of lobbying for trade restrictions which restrict entry. One such restriction is importing tariff which will reduce competition from foreign products. Such lobbying can be defined as a form of rent-seeking which means using political means to secure monopoly position.

8 0
3 years ago
A bond with 16 years to maturity and a semiannual coupon rate of 4.93 percent has a current yield of 5.29 percent. The bond's pa
zhannawk [14.2K]

Answer:

Price of bond= $1,922.92

Explanation:

<em>The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV). </em>

Value of Bond = PV of interest + PV of RV  

Semi-annual interest = 4.93% × 2,000 × 1/2 =49.3

Semi-annual yield = 5.29%/2= 2.65%

PV of interest payment

PV = A (1- (1+r)^(-n))/r

A- 49.3, r-0.02645, n- 16×2

= 49.3× (1-(1.02645)^(-10)/0.02645)  

= 1,055.521

PV of redemption Value

<em>PV = F × (1+r)^(-n) </em>

F-2000, r-0.02645, n- 16 ×2

PV = 2,000 × 1.02645^(-16×2)

PV = 867.402

Price of Bond  

1055.52  + 867.40 =1,922.92

= $1,922.92

4 0
3 years ago
Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by co
KATRIN_1 [288]

Answer:

$58,500

Explanation:

The outside basis is defined as the tax basis that a partner has on the partnership. To find it, the value of all the resources contributed by the partner is taken and the debt relief and any debt assigned is subtracted. To solve this exercise, we should follow these steps:

1. Determine the contributed capital.

According to the problem statement, Brett provided cash ($ 9,500) and a building (here the value of the adjusted base, $ 39,000, is taken). Therefore, the total contributions are $48,500.

2. Calculate capital increases.

The partnership obtained a loan for $59,000, which was shared equally among the partners. Therefore, Brett received 50%, that is, $29,500.

Now, we must add the contributed capital plus capital increases:

48,500+29,500=78,000

3. Calculate mortgage debt issues.

The nonresource mortgage is 44,000, a value that exceeds the basis of the contributed property. In that case, the surplus is taxed to the contributing partner. To determine it, simply subtract the nonresource mortgage less adjusted basis of the building:

44,000-39,000=5,000

On the other hand, the remaining mortgage on the building is calculated, by dividing the value of the adjusted base of the property, in this case, 39,000 by 2, which results in 19,500.

Therefore, mortgage debt issues are equivalent to:

5,000+19,500=24,500

We add the contributed capital plus capital increases plus mortgage debt issues:

78,000+24,500=102,500

4. Subtract debts.

The partnership assumes the nonrecourse mortgage (which is computed as a debt) for 44,000. Because this component is not covered entirely by Brett, then this amount must be deducted from his individual tax base.

Therefore:

102,500-44,000=58,500

58,500 is Brett´s outside tax basis in his LLC interest.

On a balance sheet, we can see it as follows:

Particulars                                Amount in $

Cash                                                9,500

+Adjusted basis of the                39,000

building

+50% profit sharing ratio            29,500

+Nonrecourse mortgage               5,000

less adjusted basis

+Remaining mortgage on            19,500

building

TOTAL                                             102,500

-Debt on building                          (44,000)

Outside tax basis                          58,500

7 0
3 years ago
At the beginning of 2017, your company buys a $34,000 piece of equipment that it expects to use for 4 years. The equipment has a
Elodia [21]

Answer:

32,000

8000

see below

.16

see below

Explanation:

I'm not really sure what the schedule is supposed to look like (im not good at accounting) exactly but i whipped up something real quick in excel and if you have any questions ask

the depreciable cost is just cost-salvage (the amount that's going to be depreciated) so for us its 34000-2000 or 32,000

the depreciation expense is just the depreciable cost divided by the useful live (32,000/4)=8000

see my attempt at a depreciation schedule below

The deprecation rate per unit is the depreciable cost divided by the total units

32000/200000= .16

and you can see below my attempt at the units of production schedule

4 0
2 years ago
What is one of the benefits of the current pattern of global trade?
Harlamova29_29 [7]

Answer:

The correct answer is A. One of the benefits of the current pattern of global trade is that consumers pay lower prices for goods and services.

Explanation:

Today, globalization has expanded international markets, interconnecting nations and their economies through free trade agreements, tariff elimination agreements and even through the transfer of companies from developed countries to peripheral countries, generating work in these nations and lowering production costs that allow reducing prices. All this allows consumers to access goods and services at a much lower cost than they previously accessed, thus reducing the amount they dedicate to consumption and thus increasing the performance of their wages, even allowing poverty reduction and a greater quality of life for people.

6 0
3 years ago
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