Answer:
8.38%
Explanation:
Data provided
Annual dividend = $8.5
Perpetual preferred stock = $102.50
Flotation cost = 4.00%
The computation of cost of preferred stock is shown below:-
Cost of preferred stock = Annual dividend - (Perpetual preferred stock - (Perpetual preferred stock × Flotation cost percentage))
= $8.5 ÷ ($102.50 - ($102.50 × 0.04))
= $8.5 ÷ ($102.50 - $4.1)
= $8.5 ÷ $101.4
= 8.38%
Answer:
1. $565,000 and $166,600
Explanation:
In case of recording sale instead of lease the interest should be computed on Cash selling price instead of cost of the equipment
.
Interest income = ($4,965,000 - $800,000)*8%*6/12
= $166,600
As $800,000 is due in July 1
Profit = $4,965,000 - $4,400,000
= $565,000
Therefore, The amount of profit on the sale and the interest income that Koenig would record for the year ended December 31, 2018 is $166,600 and $565,000.
I figured this out so the answer is 173542.6
A because you need to put people to practice
