Answer:
NPV= $13160
Explanation:
To calculate the present value you need to use the Net Present Value. The NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
The formula is:
n
<h3>NPV= -Io + ∑[Rt/(1+i)^t</h3>
t-1
where:
R t =Net cash inflow-outflows during a single period t
i=Discount rate of return that could be earned in alternative investments
t=Number of timer periods
In this exercise:
0= -13000
1= 6000
2= 6000
3=6000
4=6000
5=6000 + 3000 + 2500= 11500
NPV= -13000 + (6000/1.10^1) + (6000/1.10^2) + ... + (115000/1.10^5)
NPV= $13160
Answer:
$26 per share
Explanation:
The computation of the today stock price is shown below:
= Selling price of per share ÷ (number of completed ÷ number of stock split)
= $90 ÷ (7 ÷ 2)
= $90 ÷ 3.5
= $26 per share
We first divide the number of completed with the number of stock split. The value come is divided to selling price per share so that the accurate price of the stock can come.
Answer:
"Require an increase in return for any increase in risk"
Explanation:
A risk-averse investor would not consider the choice to risk $1,000 loss with the possibility of making $50 gain to be the same risk as a choice to risk only $100 to make the same $50 gain.
A risk-averse individual has a low risk tolerance or a high risk aversion. These conservative investors are willing to accept little to no volatility in their investment portfolios. Investors who are looking for "safer" investments typically invest in savings accounts, bonds, dividend growth stocks and certificates of deposit (CDs).
Answer:
The common stockholders will receive $222,000.
Explanation:
The preferred stockholders will have the right over the common stockholders to receive the dividend payable to them.
In the question:
+ The dividend payable to preferred stockholders in one-year is calculated as: Share outstanding x Dividend percentage x stated value of preferred stock = 120,000 x 8% x 5 = $48,000;
+ The dividend payable to preferred stock is for 3 year ( past two years plus current year), so total dividend payable is: 48,000 x 3 = $144,000.
So, preferred stockholder will be paid $144,000 out of $366,000 dividend distributed this year.
=> Amount of dividend distributed to common stockholders = 366,000 - 144,000 = $222,000.
