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AURORKA [14]
3 years ago
11

You own shares of Somner​ Resources' preferred​ stock, which currently sells for per share and pays annual dividends of ​$ per s

hare. If the​ market's required yield on similar shares is ​percent, should you sell your shares or buy​ more?
Business
1 answer:
dimulka [17.4K]3 years ago
8 0

Answer:

You should buy more shares

Explanation:

The above-mentioned question is missing few components. I have added them to explain on how the question would be solved if all the variables were provided. Please note the additions in bold text below. The answer of which is given afterwards.

You own 300 shares of Somner​ Resources' preferred​ stock, which currently sells for $39 per share and pays annual dividends of ​$5.50 per share. If the​ market's required yield on similar shares 12% is ​percent, should you sell your shares or buy​ more?

Solution as mentioned below:

First of all we need to calculate value of the preferred stock by dividing the annual dividend per share from the market required rate.

Value of preferred stock = 5.50 / 12%

Value of preferred stock = $45.83

Now given the fact that the current price at which the stocks are sold is $39 which is less than the price at which they are actually valued which is $45.83. You should buy more of the shares as they are currently undervalued.

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Keesha Co. borrows $200,000 cash on November 1 of the current year by signing a 90-day, 9%, $200,000 note. 1. On what date does
nalin [4]

Answer:

Explanation:

1. The maturing date of note will be 30 January 2019

( 29 days in November + 31 Days in December and 30 Days in January)

2. The interest expense would be

On this year:

= Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $200,000 × 9% × (60 days ÷ 360 days)

= $3,000

( 29 days in November + 31 Days in December)

3. On next year:

= Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $200,000 × 9% × (30 days ÷ 360 days)

= $1,500

(30 Days in January)

We assume 360 days in a year.  

4. (A) Cash A/c Dr $200,000  

             To Notes payable A/c $200,000  

(Being note is issued for cash)

(B) Interest expense A/c Dr $3,000

          To Interest payable A/c $3,000

(Being accrued interest adjusted)

(C) Interest expense A/c Dr $1,500

    Interest payable A/c Dr $3,000

    Notes payable A/c Dr $200,000

                             To Cash A/c $204,500

(Being cash is paid on maturity)

3 0
3 years ago
Information related to plant assets, natural resources, and intangibles at the end of 2020 for Kingbird, Inc. is as follows: bui
zysi [14]

Answer:

Kingbird, Inc

Balance Sheet (Partial) as on December 31, 2020

Fixed Assets

Building                                 $1,150,000

Accumulated Depreciation <u>($646,000)</u>

Net book value of Building                          $504,000

Goodwill                                                        $450,000

Coal mine                              $495,000

Accumulated Depletion       <u>($109,000)</u>

Net Value of Coal mine                                <u>$386,000</u>

Total Fixed Assets                                        <u>$1,340,000</u>

Explanation:

Fixed assets are all those asset which will be kept by the company more than one year. It is not converted to cash / Sold before one year time. If Company has the intention to sale the asset within one year then it will be classified as current asset.

All the assets are classified as the fixed assets. The depreciation and Depletion are contra asset accounts, these are adjusted against the relevant Assets and Net book value of that assets is reported on the balance sheet.

6 0
3 years ago
One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000. Today,
Dennis_Churaev [7]

Answer:

current price = $1191.79

Explanation:

given data

time t = 15 year

annual coupon bonds rate =  = 7.5 %

par value = $1000

interest rate = 5.5%

maturity time  = 14 year

to find out

current price of the bonds

solution

we get here first annual coupon rate = 7.5% of 1000

annual coupon rate  C = $75

so now we get current price of bond

current price of the bonds = \frac{C}{(1+r)} +\frac{C}{(1+r)^2} +\frac{C}{(1+r)^3} +\frac{C}{(1+r)^4} ..........\frac{C}{(1+r)^{13}} + \frac{C+par\ value}{(1+r)^{14}}      .................1

put here value

current price = \frac{75}{(1+r)} +\frac{75}{(1+r)^2} +\frac{75}{(1+r)^3} +\frac{75}{(1+r)^4} ..........\frac{75}{(1+r)^{13}} + \frac{75+1000}{(1+r)^{14}}  

current price = \frac{75}{(1+r)} \frac{1-(\frac{1}{1+r})^{14} }{r} (1+r) + \frac{1000}{(1+r)^{14}}

solve it we get

current price = $1191.79

4 0
3 years ago
2. Which statement about the factors of production is correct?
Charra [1.4K]

Answer:

A) A river from which a company draws water is called land.

Explanation:

There are mainly<u> 4 Factors of Production</u> and these are:

<em>1. Labor </em>

<em>2. Land </em>

<em>3. Capital</em>

<em>4. Entrepreneurship</em>

  • <u>Labor doesn't refer to the owner of the company.</u> It refers to the <em>work that is being done in order to finish a particular project or work</em>. This makes choice D incorrect.
  • An enterprise refers to the entire company or business. It doesn't limit itself to the supervisors involved. This makes choice C incorrect.
  • <u>Capital in the form of money is not a factor of production.</u> Raising finance for a company means raising money. An example of capital as a factor of production is<em> purchasing an equipment for commercial/business purposes</em>. This makes choice B incorrect.
  • When it comes to "land" as a factor of production, it refers to the natural resources, which means it includes not only the forests, mountains and the like but <em><u>also the oceans, rivers, lakes, etc. </u></em>as long as it is being used in the production process. This makes choice A correct.
8 0
2 years ago
Amy's school records describe her as a monochromat. what can we assume about amy's perceptual abilities
nirvana33 [79]
Estoy bien y tu ????

8 0
3 years ago
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