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olga nikolaevna [1]
2 years ago
15

Preferred Stock As of December 31, 2015, we had one class of preferred stock outstanding. We are authorized to issue approximate

ly 22 million shares of cumulative preferred stock, $1.00 par value per share.
Series A Convertible Preferred Stock: We have issued 300,000 shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $300 and an initial fair value of $349. The convertible preferred stock pays quarterly cash dividends at a rate of 8% per year ($24 per year). Each share of convertible preferred stock is convertible at any time, at the option of the holder, into 89.8876 shares of common stock for a total of 26,966 thousand shares (reflecting an initial conversion price of approximately $11.125 per share of common stock), subject to customary anti-dilution adjustments.
Common Stock We have 1.75 billion authorized shares of common stock, $1.00 par value per share. At December 31, 2015, 102 million shares were reserved for issuance under our incentive compensation plans, 48 million shares were reserved for debt to equity exchanges and 27 million shares were reserved for conversion of the Series A convertible preferred stock.

Required
Question. At December 31, 2015, Xerox reports $349 million of 8% Series A Convertible Preferred stock. What is the dollar amount of dividends that Xerox must pay on this stock (assume a par value of $90 per share)?
Business
1 answer:
sergey [27]2 years ago
7 0

<u>Solution and Explanation:</u>

The dollar amount of dividends that Xerox must pay on this stock = $2,160,000

Working for the answer

It was given in the question that, company issued 300,000 shares of Series and the convertible preferred stock pays quarterly cash dividends at a rate of 8% per year

par value of $90 per share

SO amount of dividends that Xerox must pay on this stock

=300,000$ shares $* 90$ value face value $* 8 \%$

=300,000 * 90 * 8 \%

=2,160,000

amount of dividends that Xerox must pay on this stock =2,160,000

 

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Regina Henry deposited $20,000 in a money market certificates that provides interest of 10% compound and quarterly if the amount
Andrews [41]

Answer:

Regina: Final amount=$62,769

Will Smith: Present value:  $213,216

Explanation:

Regina:

Compound quarterly means that each quarter of the year ( every three months) she will receive a 10% interest rate of her deposit. To convert this periodic rate to an annual rate( because the problem ask you about years) you use this formula :

Annual rate= ((1+Periodic rate)^(# periods))-1

In this case the number of periods means the number of quarters a year have, which is 4

Annual rate= ((1+10%)^(4))-1= 46.41%

To find the final amount Regina has after 3 year we use this formula:

Final Capital (FC)= Initial Capital (IC)*[(1+interest(i))]^(number of periods(n))

FC= $20,000*[(1+46.41%)^3]

FC=$62,769 I attached an excel figure which shows a more detailed data.

Will Smith

Semiannually means that every 6 months Will Smith will receive a 12% interest rate of the initial investment. To convert this periodic rate to an annual rate you use the same above formula:

Annual rate= ((1+Periodic rate)^(# periods))-1

In each year Will will receive twice the interest rate over the initial investment

Annual rate = ((1+12%)^(2))-1

Annual rate= 25.44%

The present value of $80,000 from now to 5 years is calculated using the formula attached, but I used Excel. First you have to copy all the cash flows of the 5 years. Then, you set the interest rate that in this case is the one that you found above( 25.44%). Finally you use the financial formula "NPV" in this way:

"=NPV(25.44%;C4:C8)" I used C4:C8 because in those excel cells i copied the cash flows.

I got that the present value of this amount is $213,216

5 0
3 years ago
Connor Corp. has large amount of data that they are trying to analyze from the last 15 years. They have an arithmetic sales grow
MrRa [10]

Answer:

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Explanation:

Blume's formula is used to combine both arithmetic and geometric returns. This is because using arithmetic growth rate exclusively would be overly optimistic for longer time horizons and on the other hand, using geometric growth rates exclusively would be overly pessimistic for short time horizons.

Using the attached formula, plug in the given numbers;

R(T) would be the sale growth rate we need to calculate.

R(T) = \frac{5-1}{15-1} *0.09 + \frac{15-5}{15-1} *0.12

R(T) =0.0257 + 0.0857

R(T) = 0.1114 as a decimal

Therefore, the forecast sales growth would be 11.14%

7 0
2 years ago
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