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FinnZ [79.3K]
2 years ago
9

Q 14.6: Morris Enterprises has 5,000 shares of 5.5%, $100 par value cumulative preferred stock and 100,000 shares of $10 par val

ue common stock. In 2018, Morris paid the preferred dividend and $25,000 in dividends to common stockholders. In 2019, Morris paid no cash dividends to stockholders. In 2020, Morris has declared a cash dividend totaling $75,000. How much in cash dividends will common stockholders receive in 2020
Business
1 answer:
trasher [3.6K]2 years ago
5 0

Answer:

Dividend paid to be paid to common  stockholder=$ 20,000

Explanation:

Common stock holders are the real risk bearers as they receive as dividends the residual amount after all other claims have been settled.

Preference shares entitles the holders to participate in a fixed dividend out of the profit made by the company. The divide is always a fixed percentage of the nominal value of the preference shares

Cumulative preference shares: Cumulative simply implies that should the company misses the payment of dividend in a particular year such unpaid dividend would be carried carried forward and paid in arrears in the following year/  

Preference dividends

2019 - 5.5% × $100 × 5,000=            $27500

2020 - 5.5% × $100 × 5,000 =            $27500

Total preferred to be paid in 2020 = 55,000

Dividends paid to common stock = Total dividend for 2020- Total preference dividend in 2020

Dividend paid to be paid to common  stockholder

= 75,000-55,000= 20,000

Dividend paid to be paid to common  stockholder=$ 20,000

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The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer an
Oksana_A [137]

Answer:

NPV = -$149,319.44

Explanation:

Ten cars will be needed, which can be purchased at a discounted price of $18,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole:

  • Annual cost of servicing, taxes and licensing    $5,100
  • Repairs, first year                                                $3,000
  • Repairs, second year                                        $5,500
  • Repairs, third year                                                $7,500

the required rate of return or discount rate for Riteway is 20%.

Cash flows:

CF₀ = -$180,000

CF₁ = -($5,100 +$3,000) = -$8,100

CF₂ = -($5,100 + $5,500) = -$10,600

CF₃ = ($9,000 X 10) - ($5,100 + $7,500) = $90,000 - $12,600 = $77,400

using an excel spreadsheet, we can calculate the NPV with r = 20%

NPV = -$180,000 + $30,680.56 = -$149,319.44

8 0
3 years ago
A machine purchased 1 year ago for $85,000 costs more to operate than anticipated. When purchased, the machine was expected to b
goblinko [34]

Answer:

Value of S=$25000.

Explanation:

Value of P= $75000

Value of n= 5 years

Value of AOC= $36000+ $1500k (k=1 to 5)

Since the salvage value would be after 5 years=

S=($75000- $10000*5) = $75000- $50000= $25000.

Value of S=$25000.

4 0
3 years ago
Sleep Tight, Inc., manufactures bedding sets. The budgeted production is for 51,500 comforters this year. Each comforter require
andrezito [222]

Answer:

Total direct labor hours= 77,250

Direct labor cost= $911,550

Explanation:

Giving the following information:

Production= 51,500 units

Standard hours= 1.5 per unit

Standard rate= $11.8 per hour

<u>First, we need to calculate the direct labor hours required:</u>

Total direct labor hours= 1.5*51,500= 77,250

<u>Now, the direct labor cost:</u>

Direct labor cost= 77,250*11.8

Direct labor cost= $911,550

3 0
2 years ago
Suppose a bond with a 10% coupon rate and semiannual coupons, has a face value of $1,000, 20 years to maturity and is selling fo
NikAS [45]

Answer:

The YTM is less than 10%

Explanation:

If a coupon rate of a bond is greater than its yield to maturity (YTM), the bond is said to trade at a premium. The Bond's current price would be greater than its Face value

If a coupon rate of a bond is less than its yield to maturity (YTM), the bond is said to trade at a discount. The bonds current price would be less than its face value

In this Question, the bond's current price ($1,197.93) is greater than its face

($1,000) which means that the bond is trading at a premium. Therefore, we can conclude that the bond's YTM is less than its coupon payment. In this question the coupon rate is 10%, therefore the YTM should be less than 10%.

8 0
3 years ago
Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession?
Bogdan [553]

Neoclassical economics places a larger focus on providing extra options and <u>improving living standards, </u><u>which are ultimately decided by long-term progress.</u>

As a result, it focuses on long-term growth rather than fighting recessions.

In actuality, neoclassical economics holds that a product's price is mostly influenced by its manufacturing costs. According to neoclassical economics, the primary factor for client decision-making therefore becomes price.

As a result, letting the neoclassical economists concentrate on prices is not the best way to combat the recession. Long-term economic performance is always emphasized by neoclassical economists.

Note that the neoclassical approach to macroeconomics emphasizes the idea that, over time, the economy tends to recover to its potential GDP and natural unemployment rate.

Learn what John Maynard Keynes would recommend to fight the recession: brainly.com/question/25586856


#SPJ4

8 0
1 year ago
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