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3 years ago

Accounting profit differs from economic profit because

1 answer:

3 0

Economic profit is the difference between total monetary revenue and total costs, but total costs include both explicit and implicit costs. Economic profit includes the opportunity costs associated with production and is therefore lower than accounting profit.

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Warephase Corporation has preferred stock outstanding. The stock has a 16% dividend rate. The stockâs market price is $80 per sh

alina1380 [7]

Answer:

The cost of the company’s preferred stock financing is 15.7%

Explanation:

In this question, we are asked to calculate a company’s cost of preferred stock financing.

Firstly, we calculate the annual dividend of the company.

Mathematically, that is equal to dividend rate * par value

From the question, dividend rate is 16% while par value is $75

Thus, Annual dividend is 16/100 * 75 = $12

To get the cost of preferred stock, we employ a mathematical approach.

Mathematically, cost of preferred stock = Annual dividend/(current price - floatation cost)

From the question, current price is $80 while the floatation cost is $3.5 per share.

Cost of preferred stock = 12/(80-3.5)

= 12/76.5 = 0.157

This is same as 15.7%

5 0

3 years ago

Read 2 more answers

A supply curve shows the relationship between the ______ and _____ when all other influences on selling plans remain the same.

adelina 88 [10]

Answer:

Price

Quantity supplied

Explanation:

The supply curve plots price on the vertical axis and quantity supplied on the horizontal axis.

The supply curve is upward sloping. This indicates the law of supply which says, the higher the price, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

8 0

3 years ago

Stryker Industries received an offer from an exporter for 27,000 units of product at $17 per unit. The acceptance of the offer w

Aloiza [94]

Answer:

$162,000

Explanation:

Income Statement - New Offer

Sales (27,000 x $17) $459,000

Less Variable Costs of the offer :

Variable manufacturing costs (27,000 x $11) ($297,000)

Net Income (Loss) $162,000

therefore,

the amount of income from the acceptance of the offer is $162,000

7 0

3 years ago

The variance of a sample of 121 observations equals 441. The standard deviation of the sample equals 1.91. 231. 21. 11.

Cloud [144]

The standard deviation of sample equals: 11

Explanation:

Given:

variance of sample ( $S^{2}$ ) = 121

no, of observations made = 441

standard deviation = ?

By using the formula:

Standard deviation (S) = $\sqrt{variance}$

= $\sqrt{S}$

= $\sqrt{121}$

= 11

Hence the standard deviation is equal to 11.

6 0

3 years ago

Torino Company has 2,800 shares of $50 par value, 6.5% cumulative and nonparticipating preferred stock and 28,000 shares of $10

Feliz [49]

Answer:

The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is $10,200.

Explanation:

In order to calculate the cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is , we have to make the following calculations.

First, we have to calculate the Annual preferred dividend = (2800*50*6.5%) = $9,100

Hence, First year preferred dividend = $9,100-$8,000 = $1,100

Finally, if we make $1,100+$9,100 = $10,200 and so this will be the cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders.

8 0

3 years ago