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Slav-nsk [51]
3 years ago
11

A $50 par value convertible preferred stock is convertible into 5 shares (exercise price of $10). The preferred is selling for $

75, and the price of the common stock is $12. If the price of the common stock rises to $20, what is the minimum percentage price increase the holder of the preferred stock should experience?
Business
1 answer:
m_a_m_a [10]3 years ago
7 0

Answer:

33.3%

Explanation:

Cost of one common stock =$12

Cost of 5 common stock = $60

Price of preferred stock = $75, which is more than $60

Hence, it would not make sense to convert the preferred stock shared into common stock as of now.

Now, if P is $20, then price of 5 stocks:

= 5 × 20

= $100

Hence, the Preferred stock price must increase to at least $100 otherwise there will be arbitrage opportunity.

Increase in price:

= price of 5 stocks - Price of preferred stock

= $100 - $75

= $25

% increase = (Increase in price ÷ Price of preferred stock) × 100

                  = (25 ÷ 75) × 100

                  = 33.3%

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Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures w
lubasha [3.4K]

Answer:

Coronado Industries

The weighted-average accumulated expenditures are:

= $8,388,333.

Explanation:

a) Data and Calculations:

Amount borrowed on June 1 = $3,170,000

Interest rate = 13%

Outstanding 11% 3-year note payable = $6,350,000

Outstanding 12% 4-year note payable = $12,350,000

Date               Expenditure      Weight     Weighted-Average

                                                                       Expenditure

March 1          $6,370,000         10/12                $5,308,333

June 1            $5,280,000          7/12                  3,080,000

December 31 $8,650,000         0/12                    0

Weighted-average accumulated expenditure $8,388,333

7 0
3 years ago
What is the total cost of a 15-year mortgage if the monthly payment is $1718.70? A. $447,585.60 B.$281.683.80 C. $309, 366.00 D.
Vaselesa [24]

Answer:

Total Cost = $309,366

Explanation:

Given:

Number of year = 15 year

Monthly payment = $1,718.70

Find:

Total Cost

Computation:

Total Cost = Number of year x 12 months x Monthly payment

Total Cost = 15 x 12 x 1,718.70

Total Cost = $309,366

3 0
3 years ago
Emma's Electronics Incorporated has total assets of ​$63 million and total debt of ​$39 million. The company also has operating
Annette [7]

Answer:

(a) 62%

(b) 3.83 times

(c) Yes

Explanation:

(a) Ellie's debt ratio:

= Total Debt ÷ Total assets

= $39 million ÷ $63 million

= 0.62 or 62%

(b) Ellie's times interest earned ratio:

= Interest ÷ EBIT

= $23 million ÷ ​$6 million

= 3.83 times

(c) Yes, it has enough times interest ratio.

If Interest expenses increased to $7 Million, then

Company could easily raise more debt to finance additional funding needs.

6 0
3 years ago
What is the current yield for a $1000 corporate bond that pays 8.0 percent and has a current market value of $870?
alexandr402 [8]

The current yield for a corporate bond = 9.19 %

Calculation :

Amount of annual interest = face value × rate of interest

                                         =  $1000 × 8.0

                                           = 8000%

Then, Current yield = amount of annual interest / current price

                                 = 8000%  ÷ $870

                                = 9.19 %

Do corporate bonds pay interest?

Corporate bonds pay interest semi-annually, which suggests that, if the coupon is five percent, each $1000 bond can pay the bondholder a payment of $25 every six months--a total of $50 per year

What Is the Current Yield?

Current yield is an investment's annual income (interest or dividends) divided by the present price of the security. This measure examines the present price of a bond, instead of looking at its face value.

Learn more about current yield :

brainly.com/question/12909555

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4 0
1 year ago
A CFP professional is a Registered Investment Advisor managing 120 million in assets. One of his clients sends a complain letter
irinina [24]

SEC reviews the information and have the authority of regulatory disclosure for the ADV.

<h3>What is SEC and how it works?</h3>

SEC is a Securities and Exchange Commission in United States who regulates the nation's securities industries.

The basic functions of the SEC is to protect the investors, capital formation and maintain the fairness in the market.

SEC is the governing body which has the authority in the case of ADV form.

Learn more about the ADV form here:-

brainly.com/question/14326387

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4 0
2 years ago
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