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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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Which of the following would not be reported as current liabilities on the balance sheet?
olga55 [171]
D. Accounts receivable
6 0
2 years ago
Oilers, Inc. refines and markets its energy products in different nations around the world. In addition, Oilers' stockholders an
nasty-shy [4]

Answer:

D. expropriation.

Explanation:

Oilers, Inc. refines and markets its energy products in different nations around the world. In addition, Oilers' stockholders and managers come from many different nations. If some of the nations where it operates decided to take over the assets of the company, this act would constitute an <u>expropriation.</u>

Expropriation: It is an act of government for taking private property against the will of the owner for the benefit of the overall public by building roads, highways, flyovers, airports, etc. The owner is just compensated as per government policy. This is an act of getting Expropriated. In legal terms, it is an exercise of eminent domain power.    

4 0
3 years ago
To test their theories, economists usually have to:____.
Vanyuwa [196]

Answer:

Confront theories predictions with evidence

Explanation:

To test economic theories, economists would observe real behavior and test it with data from the real world. Which would in turn provide evidence based on what is being tested. Confronting theories predictions with evidence is a pointer to the fact that economic theories are verifiable and their validity can be tested.

6 0
2 years ago
A conventional peg refers to. Multiple Choice where the exchange rate remains within a narrow margin of 2 percent relative to a
Trava [24]

A conventional peg refers to when a country formally pegs its currency at a fixed rate to another currency or basket of currencies where the basket reflects the geographic distribution of trade, services, or capital flows.

for better understanding lets explain what conventional peg means

  • conventional peg as related to when country formally (de jure) pinpoint their own currency at a fixed rate to the currency of another said country example is, from the currencies of major trading or financial partners and weights showing on the distribution of trade in different geographical zones
  • The known backbone or anchor currency or basket weights are public or notified to the IMF and a country authorities are able to maintain the fixed parity through direct intervention

From the above, we can therefore say that the answer A conventional peg refers to when a country formally pegs its currency at a fixed rate to another currency or basket of currencies where the basket reflects the geographic distribution of trade, services, or capital flows is correct.

learn more about exchange rates from:

brainly.com/question/21384395

3 0
3 years ago
If one worker produces 15 cones of ice cream in an hour, two workers produce 25 ice cream cones, and three workers produce 30 ic
Setler [38]

Answer:

The marginal return of production of the second worker or marginal product of the second worker is 10 cones.

Explanation:

One worker can make 15 cones of ice cream in an hour.

Two workers can make 25 cones in the same time.

While three workers can make 30 cones in an hour.

The marginal return of the production of the second worker is the contribution of the second worker in the total output.

Marginal return

= 25 cones - 15 cones

= 10 cones

5 0
3 years ago
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