Answer:
Razor Corporation
The annual dividend to the preferred stockholders is:
= $8 per share
Explanation:
a) Data and Calculations:
Cost of preferred stock = 8%
Selling price per preferred stock = $100
Annual dividend to the preferred stock = $100 * 8% = $8 per share
b) The $8 per share annual dividend of Razor's preferred stock dividend is computed by applying the fixed percentage to the preferred stock's total par value. In the above case, it is assumed that the par value or nominal value of the stock is $100. The cost of selling or issuing the stock is not factored when calculating the dividend.
Answer:
Option E
Explanation:
In simple words, the given case illustrates the cost analysis method for choosing target market segments. Under such criterion of selection, the subject company identifies various costs that it must bear in order to operate in some potential segment and after identifying those cost, such company evaluates if there will be any profit left for them in the market.
This method is complex, time consuming and needs experts advise but still is most popular nowadays as it gives most accurate results by identifying various quantitative and qualitative factors.
<span>Sue did take appropriate actions as the site coordinator. Sue saw Aaron on the news under the suspicion that he committed a serious crime. It would not reflect well on her business to have a criminal being associated with it. If Sue saw Aaron on the news, it is likely others would have seen him too and choose not to use her site, in turn having a negative effect on the site.</span>
Answer:
a. 96.87%
b. 0.08%
c. 1.79%
d. Please read the explanation below.
Explanation:
a. Number of compounding period (t) = 1
Yield to maturity = 3.23%
Assume the face value of Zero compund bond is 1.000.
Calculate the price
Price = Face Value / (1+YTM)^t
= 1.000/(1+0.323)^1
=968.71
Price expressed as a % to face value = Price / Face Value * 100 = 96.87%
b. Credit spread = Yield of AAA - Yield of treasury bond = 4.94% - 3.15%= 0.08%
c. Credit spread = Yield of B - Yield of treasury bond
= 4-94% - 3.15%
=1.79%
D. The credit rating a bond changes with its corresponding change in the credit risk. That means higher the risk, lower will be the rating of the bond and vice versa.
The investors demand for higher return on risky bonds for undertaking additional risk. Therefore, the credit spread widens as the bonds rating falls with an increase in the risk.