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NISA [10]
2 years ago
13

A company's $100, 8% preferred is currently selling for $85. What is the company's cost of preferred equity?

Business
1 answer:
shutvik [7]2 years ago
5 0

Answer:

9.4%

Explanation:

Kps = Dps/Pps x Dps = $100 x 8% = $8, Kps = 8/85 = 9.4%

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2 years ago
The Shore Hotel just paid a dividend of $2 per share. The company will increase its dividend by 6 percent next year and will the
SVETLANKA909090 [29]

Answer:

The price of the stock today is $21.58

Explanation:

The dividend is growing by three different growth rates. Thus, the three stage growth model of DDM will be used to calculate the price of the share today. Under DDM approach, we discount the expected dividends by the required rate of return to estimate the fair value of the stock today. The terminal value is calculated when the dividend growth becomes constant forever. To calculate the price of the stock today, we use next period's dividend D1.

The price per share = D1 / (1+r)  +  D2 / (1+r)^2 + ... + [(Dn * (1+g) / r - g) / (1+r)^n]

Price per share = 2 * (1+0.06) / (1+0.12)  +  2 * (1+0.06) * (1+0.04) / (1+0.12)^2  +  [(2 * (1+0.06) * (1+0.04) * (1+0.02) / (0.12 - 0.02)  /  (1+0.12)^2]

Price of stock today = $21.578 rounded off to $21.58

8 0
3 years ago
Businesses face a multitude of problems in their efforts to develop successful marketing programs. The varying legal systems of
uysha [10]

Answer: How Business fail to develop successful Marketing programs

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5 0
3 years ago
Diaz and Associates incurred the following costs in completing a tax return for a large company. Diaz applies overhead at 50% of
muminat

Answer:

Date                   Accounts Receivable                               Debit            Credit

XX-XX-XXXX    Work in Process                                    $11,330

                          Wages Payable                                                         $11,330

Date                   Accounts Receivable                               Debit            Credit

XX-XX-XXXX     Work in Process                                    $5,665

                           Manufacturing overhead                                            $5,665

<u>Working</u>

Total labor cost:

= Partner cost + Senior manager cost + Staff accountants

= (5 * 450) + (13 * 160) + (100 * 70)

= $11,330

Overhead is 50% of direct labor cost:

= 11,330 * 50%

= $5,665

4 0
3 years ago
Reagan is a new HR manager for a large company. She is concerned about the number of employees leaving the company and the lack
Kamila [148]

Answer:

The correct word for the blank space is: attrition.

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Attrition is a state in which individuals are motivated to look for environments that match their personal values. If those individuals are in environments that are not related to their ethical behavior or that grants poorly a level of morality desired, they simply leave.  

<em>The person-organization values congruence supports these actions with the excuse to minimize internal role conflict.</em>

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