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Marta_Voda [28]
2 years ago
7

(Preferred stock valuation​) You are considering an investment in one of two preferred​ stocks, TCF Capital or TAYC Capital Trus

t. TCF Capital pays an annual dividend of $2.16​, while TAYC Capital pays an annual dividend of $1.94. If your required return is 11​percent, what value would you assign to the​ stocks?
The value of the TCF Capital preferred stock is $______ per share
Business
1 answer:
Effectus [21]2 years ago
3 0

Answer:

Price of TCF Capital = $19.6363 rounded off to $19.64

Price of TAYC Capital = $17.6363 rounded off to $17.64

Explanation:

The value of current price of a preferred stock can be calculated using the formula for perpetuity. A preferred stock qualifies as perpetuity because its dividend payments are of a constant amount, are paid after equal intervals of time and are for an indefinite time period. The formula for price of the stock is as follows,

P0 = Dividend / r

Where,

r is the required rate of return

Price of TCF Capital = 2.16 / 0.11

Price of TCF Capital = $19.6363 rounded off to $19.64

Price of TAYC Capital = 1.94 / 0.11

Price of TAYC Capital = $17.6363 rounded off to $17.64

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7 0
2 years ago
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Finger [1]

Answer: According to complete question "more than two-thirds of children will score between 85 and 115".

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3 years ago
An employee has gross earnings of $1,200 and withholdings of $91.80 for social security and medicare taxes and $120 for income t
satela [25.4K]

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3 0
2 years ago
On October 14, the Patrick Company sold merchandise with an invoice price of $1,200 ($770 cost), with terms of 2/10, n/30, to th
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Answer:

Patrick Company

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Oct. 14: Debit Accounts receivable (Baxter Company) $1,200

Credit Sales revenue $1,200

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Oct. 14: Debit Cost of goods sold $770

Credit Inventory $770

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Credit Cost of goods sold $170

To record the cost of goods returned.

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To record the receipt of check on full settlement, including discounts.

Explanation:

a) Data and Calculations:

Oct. 14: Accounts receivable (Baxter Company) $1,200 Sales revenue $1,200, terms of 2/10, n/30.

Oct. 14: Cost of goods sold $770 Inventory $770

Oct. 18: Sales returns $220 Accounts receivable (Baxter Company) $220

Oct. 18: Inventory $170 Cost of goods sold $170

Oct. 24: Cash $960 Cash discounts $20 Accounts receivable (Baxter Company) $980

7 0
2 years ago
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