Firstly, Loan A has a lower interest rate (0.25% lower) and therefore the interest payed is lower ($209.49 cheaper) and of course the total paid is lower for Loan A.
The benefit of Loan B is the term of payment is longer and the monthly repayments are lower. This could be good for someone working minimum wage due to having a low income.
In conclusion, I think Loan A would be better due to the interest being lower which is always a plus for loans.
Answer:
Given that,
Flounder Inc. issued convertible bonds = $2,840,000 par value
Interest rate = 7%
Sold for cash = $97
If the bonds had not included the conversion feature, then
Sold for = $95
Therefore, the journal entry is as follows:
Cash A/c ($2,840,000 * 0.97) Dr. $2,754,800
Discount on issue of Bond A/c Dr. $85,200
To 7% Convertible Bonds payable $2,840,000
Answer:
7.09 %
Explanation:
Cost of preferred equity = Dividend / Market Price x 100
therefore,
Cost of preferred equity = $1.90 / $26.80 x 100 = 7.09 %
I don’t understand but I need points
Answer:
The price of Apple just after the current dividend was paid is $26.79.
Explanation:
Note: See the attached file for the calculation of present values for year 1 to 10 dividends.
From the attached excel file, we have:
Previous year dividend in year 1 = Dividend just paid = $3
Total of dividends from year 1 to year 10 = $19.17617169980840
Year 10 dividend = $7.781227380
Therefore, we have:
Year 11 dividend = Year 10 dividend * (100% + Perpetual dividend growth rate) = $7.781227380 * (100% + 3%) = $8.0146642014
Price at year 10 = Year 11 dividend / (Rate of return - Perpetual dividend growth rate) = $8.0146642014 / (20% - 3%) = $47.1450835376471
PV of price at year 10 = Price at year 10 / (100% + Required return)^Number of years = $47.1450835376471 / (100% + 20%)^10 = $7.61419419713817
Price of Apple = Total of dividends from year 1 to year 8 + PV of price at year 10 = $19.17617169980840 + $7.61419419713817 = $26.79
