The common stock of Shaky Building Supply has a beta that is 22 percent greater than the overall market beta. Currently, the mar
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Answer:
The answer is 16 years.
Explanation:
The formula for calculating the value of an investment that is compounded annually is given by:
Where:
is the number of years the investment is compounded,
is the annual interest rate,
is the principal investment.
We know the following:
And we want to clear the value <em>n</em> from the equation.
The problem can be resolved as follows.
<u>First step:</u> divide each member of the equation by :
<u>Second step:</u> apply logarithms to both members of the equation:
<u>Third step:</u> apply the logarithmic property in the second member of the equation:
Fourth step: divide both members of the equation by
We can round up the number and conclude that it will take 16 years for $10,000 invested today in bonds that pay 6% interest compounded annually, to grow to $25,000.
Answer:
$135000
Explanation:
Given: Outstanding cumulative preferred stock of 10000 shares of 8% at $100
Dividend paid= $375000.
Now, calculating preferred stock.
Preferred stock=
∴ Preferred stock= $80000
Cumulative dividend paid to shareholder=
∴ Cumulative dividend paid to shareholder= $240000
Next, computing the amount of dividends will common stockholder receive.
Total dividend paid= $375000.
Dividend received by common stockholder=
⇒ Dividend received by common stockholder=
∴ $135000 dividend will be received by common stockholder.