Answer:
The cost of preferred stock is 10.2%
Explanation:
The actual amount realized from issuing the preferred of $100 per share par value is the par value less cost of issuing and selling stock of $2 per share, in other words,$98($100-$2) was realized per share from the issuance.
Having known the net amount realized, the cost of preferred stock can be calculated as follows:
cost of preferred stock =return on preferred stock/net amount realized
return is 10% of $100(par value), i.e $10 per share
cost of preferred stock =$10/$98=10.2%
Note that preferred is not tax deductible like debt financing , hence the rate of tax given is not considered in determining the cost of preferred stock.
Answer:
Income = $8,200
Less:
Federal tax 10% = -$820
State tax at 5.5% = -$451
FICA at 7.65% = -$627.30
Total deduction = -$1,898.30
Net pay = $6,301.70
Answer:
(i) $26.49375
(ii) $29.11
(iii) 52.54%
Explanation:
Required rate of return using CAPM model:
= risk free rate + beta (expected return - risk free rate)
= 0.06 + 2.3 (0.15 - 0.06)
= 0.267 or 26.7%
Growth rate = (1 - dividend payout ratio) × ROE
= (1 - 0.45) × 0.18
= 0.099 or 9.9%
a)
Dividends per share will be $4.05 since payout ratio is 45%
Intrinsic value of share = D1 ÷ (Rate - growth)
= 4.05(1.099) ÷ (0.267 - 0.099)
= 4.45095 ÷ 0.168
= $26.49375
b)
Price after 1 year = 26.49( 1 + 0.099)
Price after 1 year = $29.11
c)
One year holding period return = ( $29.11 + 4.45 - 22) ÷ 22
= 0.5254 or 52.54%
Answer: Friendly's would say that you were paying an APR of 1485.71%.
We arrive at the answer as follows
First we calculate the dollar interest on the $7 loan and the rate of interest.
This 28.5714% interest is for a loan that lasts for one week.
Since a year has 52 weeks, we can find the APR as 
.
<span>Arguments from precedent and analogy are two central forms of reasoning found in many legal systems, especially ‘Common Law’ systems such as those in England and the United States. Precedent involves an earlier decision being followed in a later case because both cases are the same. Analogy involves an earlier decision being followed in a later case because the later case is similar to the earlier one. The main philosophical problems raised by precedent and analogy are these: (1) when are two cases the ‘same’ for the purposes of precedent? (2) when are two cases ‘similar’ for the purposes of analogy? and (3) in both situations, why should the decision in the earlier case affect the decision in the later case?</span>
