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2 years ago

13

What is the value of a preferred stock that pays a perpetual dividend of $125 at the end of each year when the interest rate is

5 percent?

1 answer:

Alina [70]2 years ago

6 0

Answer: $2500

Explanation:

The value of a preferred stock that pays a perpetual dividend of $125 at the end of each year when the interest rate is 5 percent will be calculated by using the formula:

= Cf/i

where,

Cf = Cash flow = $125

i = Interest rate = 5% = 0.05

Therefore, the value of the preferred stock will be:

= Cf/i

= $125/0.05

= $2500

The value of the preferred stock is $2500.

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Mateo exchanges a rental house at the beach with an adjusted basis of $225,000 and a fair market value of $200,000 for a rental

FromTheMoon [43]

Answer:

a.$0

Explanation:

Adjusted basis is the cost of a property and other related costs incurred in acquiring, maintaining, or upgrading the property.

Fair value represent the worth of a property. It is the amount that one should expect to fetch from the market if they were to sell the property.

The fair value or the worth for Mateo's rental house is $200,000. He obtains another rental house with a fair value of $180,000 and cash $20,000.

He exchanged property worth $200,000 for $200,000

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2 years ago

Linda loves buying shoes and going out to dance. Her utility function for pairs of shoes, S, and the number of times she goes d

padilas [110]

Answer:

See Explanation

Explanation:

Given

$U(S,T) = 2ST$

$M_U_S =2T$

$M_U_T=2S$

The following details are omitted from the question

$P_S= \$50$ --- Price of the Shoes

$P_T = \$50$ --- Spent on dancing

$B = \$500$ --- Budget on shoe and dancing

Solving (a): Her budget line

First, we determine her budget equation (B).

This is calculated by:

$B = P_S * S + P_T *T$

This gives:

$500 = 50 * S + 50 * T$

$500 = 50 S + 50 T$

Divide through by 50

$10 =S + T$

$S + T = 10$ --- The budget equation

<em>See attachment for the budget line equation</em>

Solving (a): Optimal Consumption Bundle Point

First, we determine the marginal rate of substitution (MRS) using:

$MRS = \frac{MU_s}{MU_t} = 1$

$MRS = \frac{2S}{2T} =1$

This implies that:

$\frac{2S}{2T} = 1$

Cross Multiply

$2S = 2T * 1$

$2S = 2T$

Divide by 2

$S = T$

Substitute T for S in the budget equation

$T + T= 10$

$2T = 10$

$T=5$

Recall that:

$S = T$

$S = 5$

So, the point if optimal consumption bundle is (5,5)

<em>See attachment for point R</em>

5 0

2 years ago

Rappaport Corp.'s sales last year were $385,000, and its net income after taxes was $23,000. What was its profit margin on sales

Marianna [84]

Answer:

5.97%

Explanation:

Profit margin is an example of profitability ratio

profitability ratio measures the ability of a firm to generate profit from its assets

Profit margin = net income / sales

= $23,000. / $385,000,

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2 years ago

An engineer at 3M Company developed a new product concept called Post-It notes by applying adhesive glue to small pieces of pape

Korvikt [17]

Answer: Invention

Explanation: An invention is the creative ability of an individual to make something that has not been made before.

It is also a process of creating an item, service or something that has not been seen or used before.

The Engineer at 3M made a new product concept called Post-It notes by applying adhesive glue to small pieces of paper is a new invention.

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3 years ago

Vaughn Manufacturing reported net income of $1.5 million in 2017. Depreciation for the year was $153.008, accounts decreased $34

borishaifa [10]

Answer:

..................................................Vaughn Manufacturing.......................................

Cash flows from operating activities 2017

Net Income.........................................................................$1,500,000

Adjustments to reconcile net income to Net Cash provided by Operating Activities

Add Decrease in Accounts Receivable .........$343,900

Less Decrease in Accounts Payable.............$(282,900)

Add Depreciation.............................................$153,000....$214,000

Net cash provided by Operating Activities........................$1,714,000

7 0

2 years ago