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Ber [7]
3 years ago
6

Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is trea

ted like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders receive a fixed payment—their dividend—before the company’s residual earnings are paid out to its common stockholders and, as with common stock, preferred stockholders can benefit from an appreciation in the value of the firm’s stock securities. Consider the following case of Marston Manufacturing Company: Marston Manufacturing Company pays an annual dividend rate of 11.00% on its preferred stock that currently returns 14.74% and has a par value of $100.00 per share. What is the value of Marston’s preferred stock? $100.00 per share $89.56 per share $74.63 per share $111.94 per share
Business
1 answer:
mel-nik [20]3 years ago
6 0

Answer:

$74.63 per share

Explanation:

The computation of the value of preferred stock is shown below:

As we know that  

Value of the preferred stock = Annual dividend rate ÷ Returns on the stock

where,

Dividend on the preferred stock = Dividend rate × Par value

= 11% × $100

= $11

And, the return is 14.74%

So, the value of the preferred stock is  

= $11 ÷ 14.74%

= $74.63 per share

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Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-st
suter [353]

Answer:

1. For the Year Ended December 31,2014

2. Revenues

3. Sales Revenue $96,639

4. Rent Revenue $17,230

5. Total Revenues $113869

(Sales Revenue $96,639 + Rent Revenue $17,369)

6. Expenses

7. Cost of Goods Sold $60,570

8. Selling Expenses $17,567

9. Administrative Expenses $9,138

10. Interest Expense $1,860

11. Total Expenses $89135

(Cost of Goods Sold $60,570 + Selling Expenses $17,567 + Administrative Expenses $9,138 +Interest Expense $1,860)

12. Income Before Income Tax $24,734

13. Income Tax Expense $9,070

14. Net Income/Loss $15,664

(Income Before Income Tax  $24,734 - Income Tax Expense $9,070)

15. Earnings Per Share $0.38

Earnings per share = ($15,664 ÷ 40,550) = $0.38

Explanation:

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2014 info related to P. Bride Company. ($000 omitted).

From the information given, we can arranged the values as follows into a balance sheet

1. For the Year Ended December 31,2014

2. Revenues

3. Sales Revenue $96,639

4. Rent Revenue $17,230

5. Total Revenues $113869

(Sales Revenue $96,639 + Rent Revenue $17,369)

6. Expenses

7. Cost of Goods Sold $60,570

8. Selling Expenses $17,567

9. Administrative Expenses $9,138

10. Interest Expense $1,860

11. Total Expenses $89135

(Cost of Goods Sold $60,570 + Selling Expenses $17,567 + Administrative Expenses $9,138 +Interest Expense $1,860)

12. Income Before Income Tax $24,734

13. Income Tax Expense $9,070

14. Net Income/Loss $15,664

(Income Before Income Tax  $24,734 - Income Tax Expense $9,070)

15. Earnings Per Share $0.38

Earnings per share = ($15,664 ÷ 40,550) = $0.38

7 0
3 years ago
Read 2 more answers
The deadweight loss from a tax per unit of good will be smallest in a market with a. inelastic supply and elastic demand. b. ine
deff fn [24]

The deadweight loss from a tax per unit of good will be smallest in a market with inelastic supply and inelastic demand.

The Deadweight loss refers to loss that occurs when supply and demand are not in equilibrium and thus, result in market inefficiency.

Usually, the value of the deadweight loss varies with the demand elasticity and supply elasticity.

So, when the demand or supply is inelastic, the deadweight loss of the taxation will be smaller because the quantity bought or sold varies less with price.

Therefore, the answer is B. because the deadweight loss from a tax per unit of good will be smallest in a market with inelastic supply and inelastic demand.

Learn more about this here

<em>brainly.com/question/13719669</em>

7 0
2 years ago
As nations learn to specialize in production, they will trade with other nations when what happens?
Goryan [66]
It c beehive :dndisbsbsjakk33 SJSU’s do d e ejeidjdjcnfjdidosodsbsbd d r g h f. D d ddjdidididhdbdjdjdjdndjfjdjdj
7 0
2 years ago
Marcy's, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2016 third-quarter
marysya [2.9K]

Answer:

Purchases is $3400  million

Explanation:

Cost of goods formula comes readily helpful in this case.

Cost of goods sold=beginning inventory+purchases-ending inventory

by arranging the formula,the purchases formula is given thus:

Purchases=cost of goods sold-beginning inventory+ending inventory

cost of goods sold is $2,900 million

ending inventory is $4,600 million

beginning inventory is $4,100 million

purchases=($2,900-$4,100+$4,600) million

purchases=3400  million

8 0
3 years ago
According to their comparative advantage: a. Wilson should decorate cupcakes and Kendall should decorate cookies. b. Kendall sho
blsea [12.9K]

Answer:

B.

Explanation:

This economic law was recognized by a political economist, David Ricardo in his book, ‘Principles of Political Economy and Taxation’ in 1817.

Comparative advantage refers to the ability of a country to produce particular goods or services at lower opportunity costs as compared to the others in the field.

According to this law, if Kendall is good at decorating cupcakes and Wilson is the best at decorating cookies, then Kendall should decorate cupcakes and Wilson should decorate cookies becuase they can do it with lower costs.

The following are the assumptions of the Ricardian doctrine of comparative advantage:

-There are only two countries, assume A and B.

-Both of them produce the same two commodities, X and Y.

-Labour is the only factor of production.

-The supply of labour is unchanged.

-All labour units are homogeneous.

-Tastes are similar in both countries.

-The labour cost determines the price of the two commodities

-The production of commodities is done under the law of constant costs or returns.

-The two countries trade on the barter system.

-Technological knowledge is unchanged.

-Factors of production are perfectly mobile within each country. However, they are immobile between the two countries.

-Free trade is undertaken between the two countries. Trade barriers and restrictions in the movement of commodities are absent.

-Transport costs are not incurred in carrying trade between the two countries.

-Factors of production are fully employed in both the countries.

-The exchange ratio for the two commodities is the same.

7 0
3 years ago
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