Type of power based on manager's ability to influence employees with something of value to them.

Rachel's Designs has 1,100 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining

gladu [14]

Answer:

The dividend payable to the cumulative preferred stock holers in 2021 is $11,550 while the amount payable to common stock holders is $1,450.

Explanation:

Cumulative preferred stock dividends accrue and becomes payable when the reporting entity has favourable cash flows. Rachael Designs plans to make payment of $13,000 dividends in 2021. As the annual cumulative preferred dividend is $3,850 (1,100 shares x $50 x 7%), the amount due over three years will be $3,850 x 3 whcih is $11,550. Thus, out of the proposed cash outflow of $13,000, the amount of $11,550 will be paid to cumulative preferred stock holders while only $1,450 will be paid to the common stock holders.

5 0

4 years ago

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $150,000 or $290,000 with equal

lara [203]

Answer:

(A) The price you will be willing to pay for the portfolio is $194,690.

(B) The expected rate of return is 13%.

(C) The price you will be willing to pay for the portfolio is $181,818.

Explanation:

A. If you require a risk premium of 7%, how much will you be willing to pay for the portfolio?

The amount you be willing to pay for the portfolio can be calculated using the following formula:

The price you will be willing to pay for the portfolio = Expected cash flow / (1 + Required rate of return) ................... (1)

Where;

Expected cash flow = ($150,000 * 0.5) + ($290,000 * 0.5) = $220,000

Required rate of return = Risk free rate + Risk premium = 6% + 7% = 13%, or 0.13

Therefore, we have:

The price you will be willing to pay for the portfolio = $220,000 / (1 + 0.13) = $220,000 / 1.13 = $194,690

B. Suppose the portfolio can be purchased for the amount you found in (a). What will the expected rate of return on the portfolio be?

The expected rate of return (E(r)) can be calculated using the following formula:

Amount to be paid for the portfolio * [1 + E(r)] = Expected cash flow

Therefore, we have:

$194,690 * [1 + E(r)] = $220,000

$194,690 + ($194,690 * E(r)) = $220,000

$194,690 * E(r) = $220,000 - $194,690

$194,690 * E(r) = $25,310

E(r) = $25,310 / $194,690 = 0.13, or 13%

Therefore, the expected rate of return is 13%.

C. Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?

Required rate of return = Risk free rate + Risk premium = 6% + 15% = 21%, or 0.21

Using equation (1) in part A, we have:

The price you will be willing to pay for the portfolio = $220,000 / (1 + 0.21) = $220,000 / (1.21) = $181,818

6 0

3 years ago

What is the difference between accounts payable and accounts receivable?

NeX [460]

Accounts payable - Accurately tracking what's owed to suppliers, ensuring payments are properly approved and processing payments.

$\: \: \: \: \: \: \: \: \: \: \: \:$

Accounts receivable - The balance of money due to a firm for goods or services delivered or used but not yet paid for by customers.

5 0

2 years ago

Using the following accounts and balances, prepare the Stockholders’ Equity section of the balance sheet. Refer to the lists of

uysha [10]

Answer:

Explanation:

Stockholder's Equity

Paid in Capital:

Common Stock $48,000,000

Paid in Capital in excess of Par - Common Stock $6,400,000

Paid in Capital from sale of Treasury Stock $4,500,000

[58,900,000]

Total Paid in Capital $58,900,000

Retained earnings $63,680,000

Total Paid in Capital & Retained Earnings $122,580,000

Deduct: Treasury Stock $5,200,000

Total Stockholder's Equity $117,380,000

7 0

3 years ago

Dan, Francis, and Pedro were on a team at their engineering company. Though Dan had the most experience of the three, he did not

elena-14-01-66 [18.8K]

Answer:

Shared.

Explanation:

Shared leadership is a leadership style that comprehensively disseminates leadership obligation, to such an extent that individuals inside a group and association lead one another.

5 0

3 years ago

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Type of power based on manager's ability to influence employees with something of value to them.​

Type of power based on manager's ability to influence employees with something of value to them.