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o-na [289]
3 years ago
10

A convertible preferred stock is convertible at $10, pays a 4% annual dividend, is callable at $110, and is trading at a current

market price of $116. Based on these details, what is the parity price of the common stock
Business
1 answer:
Leno4ka [110]3 years ago
4 0

Answer:

$11.60

Explanation:

In ascertaining the parity price of the common stock, we need to ascertain the conversion ratio which is the par price of the preferred stock divided by the convertible price

The par value of the preferred stock=$100(since call price is $110)

convertible price=$10

conversion ratio=$100/$10=10

The parity price is the current market price of the preferred stock divided by the conversion ratio

Parity price=$116/10

Parity price=$11.60

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Thomas Engel contributed equipment, inventory, and $45,000 cash to a partnership. The equipment had a book value of $25,000 and
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Answer:

Thomas capital

Equipment                $30,000

Inventory                   25,000

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Total                       <u>  100,000</u>

Explanation:

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A firm has an issue of preferred stock outstanding that has a stated annual dividend of $4. The required return on the preferred
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Answer:

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