Answer: d. $133.74
Explanation:
The dividend paid to preferred shareholders is constant and based on the annual rate of return on the stock. If they plan to sell at a price of $743 per share, the dividend will be:
Dividend = Annual rate of return on stock * Price of stock
= 18% * 743
= $133.74
Answer:
Normative
Positive
Normative
Positive
Explanation:
Positive Economics is objective and statements are usually based on facts and economic theory. They can be tested.
For example, the statement , In some circumstances, if taxes are lowered,
government revenues actually increase, can be tested and it has it basis in economic theory
Normative economics is based value judgements, opinions and perspectives. For example, the statement - taxes are too high - is based on opinion. To some it is too high while to others it would be too low
Answer:
$160 overapplied
Explanation:
Icy Mocha company estimates it's factory overhead costs to be $35,000 and machine hours to be 5,000 for a period of one year.
The actual number of hours worked on job 333 and 334 equals a total of 4,980
The actual factory overhead costs are $34,700
The first step is to calculate the predetermined overhead rate
= Overhead costs/machine hours
= $35,000/5,000
= $7
The amount of either over or underapplied factory costs can be calculated as follows
= predetermined overhead rate×actual number of hours worked
= $7×4,980
= $34,860
The amount is then subtracted from the actual overhead costs
= $34,700-$34860
= -$160
= $160 overapplied
Hence the amount of overapplied factory overhead is $160
Answer:
Explanation:
a) investors wil receive 6% x ( 1-0.35)
= 3.9% risk free debt after tax.
After tax return from risk free preferred stock earnings must be equal.
to evaluate the cost of capital fro preferred stock = 3.9%/(1-0.15)
= 4.59%
b) the after-tax debt cost of capital = 6% x (1- 0.40)
= 3.60%.
therefore, 3.60% is cheaper than the 4.59% preffered stoch cost per capital
c) r* = 1 - [{(1 - 0.40)(1 - 0.15)} / (1 - 0.35)] = 1 - 0.7846 = 0.2154, or 21.54%
Hence, 4.59% x (1 - 0.2154) = 3.60%
The anwser to this question is b. prepare the statement of the retained earnings
