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Gala2k [10]
3 years ago
11

Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is trea

ted like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy.
However, similar to bonds, preferred stockholders receive a fixed payment-their dividend-before the company's residual earnings are paid out to its common stockholders and, as with common stock, preferred stockholders can benefit from an appreciation in the value of the firm's stock securities.

Lancashire Railway Company (LRC) pays an annual dividend rate of 11.80% on its preferred stock that currently returns 15.81% and has a par value of $100.00 per share. What is the value of LRC’s preferred stock?

a. $74.64 per share
b. $89.57 per share
c. $100.00 per share
d. $111.95 per share

Suppose that due to high inflation, interest rates rise and pull the preferred stock's yield to 20.55%. The value of the preferred stock will:_____
Business
1 answer:
EastWind [94]3 years ago
7 0

Answer:

  1. $74.64
  2. $57.42

Explanation:

1. Value of LRC's preferred stock

= Preference Dividend / Return on Preference share

= (11.8% * 100) / 15.81%

= 74.6363

= $74.64

2. Value of preference share when yield goes to 20.55%;

= Preference Dividend / Return on Preference share

= (11.8% * 100) / 20.55%

= $57.42

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When does the cost of inventory become an​ expense? A. When cash is collected from the customer B. When inventory is purchased f
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C. When inventory is delivered to a customer

Explanation:

As we know that the inventory is good that the company sold to the customers. Through these goods, the company can able to generate huge profits and gain a competitive advantage in the market

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Kahil Mfg. makes skateboards and uses a weighted average process costing system. On May 1, 2013, the company had 400 boards in p
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Answer:

Equivalent Units     Materials        1700       Conversion  2630

<u>Cost per EUP Materials:</u>  38.308     Conversion : 19.55

Explanation:

The weighted average method can be calculated using the beginning inventory and the units started .

 

Kahil Mfg

Weighted Average Method

Particulars        Units          % Of Completion             Equivalent Units

                                        Materials    Conversion  Materials    Conversion

Beginning

Inventory     400                70                 85             280               350

<u>Units Started  3800          40                  60            1520             2280         </u>

<u>Equivalent Units                                                        1700              2630</u>

<u />

Beginning WIP Inventory costs

                                               Direct material             Conversion  

                                                     $ 4,349                        4,658

Current period costs

<u>                                                        60,775                        46,750        </u>

<u>Total Costs                                 65,124                          51,408            </u>

<u />

<u>Cost per EUP</u>

                                               65,124/1700              51,408/2630

                                                 38.308                      19.55

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Answer:

True

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Government regulations on credit aim to
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A. ensure lenders are rapaid.

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