Answer:
the required rate of return i r=0.13%
Explanation:
In order to calculate the required rate of interest in the case of a perpetual preferred stock we will use the following formula:
P(p) = D(p) / r
where P(p) is the preferred price of the stock, D(p) is the preferred dividend price and r is the required rate of interest.
This gives us the following values:
30 = 4 / r
r = 4 / 30
r = 0.13%
The yield of maturity for this bond is "8.4 percent".
We can calculate this in the following way;
<span>Yield to maturity = YTM = {($1,000 x .06) + [($1,000 - 900)/5]}/[($900 + $1,000)/2]
=(60 + 20) / (950)
=80/950
=0.084
=0.084 x 100
= 8.4 percent</span>
Answer: See explanation
Explanation:
a. Calculate the predetermined overhead rate Overhead Rate per hour
Predetermined Overhead rate will be the estimated total manufacturing overhead divided by the estimated total direct labor hours. This will be:
= $ 921,600/51,200
= $ 18
(b) Calculate how much manufacturing overhead will be applied to production
Manufacturing overhead that'll be applied to production will be the predetermined overhead rate multiplied by the actual total direct labor hours. This will be:
= $ 18 × 48,900 direct labor hours
= $ 880,200
(c) Is overhead over- or underapplied? By how much?
The Actual Overhead Incurred = $902,900 while the manufacturing overhead applied = $880,200. This shows that overhead is underapplied due to the fact that manufacturing overhead applied is less than the actual overhead that is incurred.
Therefore, the amount of overhead that was underapplied will be:
= $ 902,900 - $ 880,200
= $ 22,700
(d) What account should be adjusted for over-or underapplied overhead? Should the balance be increased or decreased?
Based on the scenario in the question and the answers calculated, the cost of goods sold should be increased.
Answer:
a. Premium
b. Discount
c. Discount
Explanation:
a. Valley issued $300,000 of bonds with a stated interest rate of 7 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 7% - 6% = 1% premium
Therefore, Valley's bond will sell at a premium.
b. Spring issued $220,000 of bonds with a stated interest rate of 5 percent. At the time of issue, the market rate of interest for similar investments was 6 percent.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, Spring's bond will sell at a discount.
c. River Inc. issued $150,000 of callable bonds with a stated interest rate of 5 percent. The bonds were callable at 102. At the date of issue, the market rate of interest was 6 percent for similar investments.
Premium (discount) = Bond's stated interest rate - Market rate of interest for similar investments = 5% - 6% = -1% discount
Therefore, River Inc.'s bond will sell at a discount.
