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Answer:
Explanation:
a. On the basis of the conversion ratio and the price of the common shares, what is the current conversion value of each preferred share?
Conversion Value = No of Common Shares × Market Price Per Share
= 5 × $20
= $100
b. If the preferred shares are selling at $9696 each, should an investor convert the preferred shares to common shares?
Total Value of preferred Share = Share Price + Dividend Payment Per Share
= $9696 + $10
= $ 9706
Total Value of 5 Common Stock = ((Market Price of 1 Share + Dividend per Share) × 5)
= ((20 + 1) × 5)
= $ 105
No. The investor should not convert the preferred shares to common shares. This is because, the value of one preferred share exceeds the value of the converted common shares by $9601. Thus, based on the value of the converted and non-converted preferred share, the non-converted preferred share is more valuable than the converted one. Thus, the investor should not convert the preferred shares.
c. What factors might cause an investor not to convert from preferred to common stock?
If the value of the converted shares is lower than that of the original preferred share, it makes the conversion devalue an investor's overall investment value.
Additionally, if the investor is unwilling to have residual claim on profits. This is because common stockholders receive their dividends after debt and preference shareholders get their claims. Therefore, the preferred shareholder could see it best to retain their holdings as Preferred and not Common.
Answer:
FV in 5 years $8,654
FV in 10 years $12,482
FV in 20 years $25,965
Explanation:
Future value is the amount that includes the principal amount invested and interest earned on this amount including the compounding effect.
Formula for Future value is as follow
FV = PV ( 1 + r )^n
Where
PV = Present value = $6,000
r = rate of interest = 7.6%
FV= Future Value
5 years
n = numbers of year = 5
FV = $6,000 (1 + 7.6%)^5 = $8,654
10 years
n = numbers of year = 10
FV = $6,000 (1 + 7.6%)^10 = $12,482
20 years
n = numbers of year = 20
FV = $6,000 (1 + 7.6%)^20 = $25,965
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At the financial statements of Andrews will this: growth internet cash from Operations on the coins waft declaration.
Financial statements are written information that brings the business activities and the financial performance of a business enterprise. economic statements are regularly audited by way of government agencies, accountants, companies, and so on. to ensure accuracy and for tax, financing, or making investment purposes. The earnings announcement, stability sheet, and statement of coins flows are required economic statements. those three statements are informative equipment that buyers can use to research an agency's financial power and offer a short photo of a corporation's economic health and underlying price.
Financial statements are formal statistics of the financial activities and role of a business, individual, or other entity. relevant monetary facts are presented in a dependent manner and in a shape that is simple to understand.
Learn more about financial statements here: brainly.com/question/26240841
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