Joe Divola buys a share of preferred stock that has a par $100 with a 5%...
Joe Divola buys a share of preferred stock that has a par $100 with a 5% annual dividend. If the investor needs a 9% return to invest, how much can he pay today?
Homework Answers
rate positively ..
| computation of preferred stock price | |||||
| annual dividend= | 5 | ||||
| 100*5% | |||||
| Required rate = | 9% | ||||
| Preferred stock price = annual dividend/Required rate | |||||
| 5/9% | |||||
| $ 55.56 | |||||
| Ans = | $ 55.56 | ||||
Add Answer to:
Joe Divola buys a share of preferred stock that has a par $100
with a 5%...
Potter's Violin Co. has just issued nonconvertible preferred stock with a par value of $100 and...
Potter's Violin Co. has just issued nonconvertible preferred stock with a par value of $100 and an annual dividend rate of 17.57 percent. The preferred stock is currently selling for $98.83 per share. Which rate of return does the investor expect to receive on this stock if the stock is purchased today? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
A preferred stock is expected to pay every quarter into indefinite future, the following dividend yield,...
A preferred stock is expected to pay every quarter into indefinite future, the following dividend yield, dented by DY: DY = The annual yicld on 10-year GỌC bond, prevailing at the time of payment + 4% The par value of the preferred stock is $100. Suppose the annual yield on 10-year GOC bond is expected to be as: 1.5% at the end of the first quarter, 2% at the end of the 2 quarter, 2.5% at the end of the...
Assume that you would like to purchase 100 shares of preferred stock that pays an annual...
Assume that you would like to purchase 100 shares of preferred stock that pays an annual dividend of $6.00 per share. However, you have limited resources now, so you cannot afford the purchase price. In fact, the best you can do now is to invest your money in a mutual fund that offers an average return of 6% compounded monthly. Because the preferred stock is riskier, it has an annual rate of return of 12% (assume that this rate will...
Ah Seng Manufacturing has outstanding preferred stock issue with a par value of $50 per share....
Ah Seng Manufacturing has outstanding preferred stock issue with a par value of $50 per share. The preferred shares pay dividends annually at a rate of 6% What is the annual dividend on Ah Seng preferred stock ? If investors require a return of 7% on the stock and the next dividend is payable 1 year from now what is the price of Ah Seng preferred stock?
8) Natal Corp. has issued some $100 par preferred stock with a dividend of 10% of...
8) Natal Corp. has issued some $100 par preferred stock with a dividend of 10% of par value. The required rate of return on the preferred stock is 9%. a) Compute the current value of the preferred stock. b) If the preferred stock sells in the market at $115 per share, what is the expected rate of return from the preferred stock. c) If Natal announces that it will redeem the preferred stock in 4 years at a redemption price...
A preferred stock has a par value of $110 and pays an annual dividend of 5%...
A preferred stock has a par value of $110 and pays an annual dividend of 5% of par. If similar investments have an annual rate of return of 3%, what is the current value of this preferred stock? (round to nearest cent). Can you please show me how to do this. ThanK You!!!
2. The valuation of preferred stock The formula for the valuation of a share of preferred...
2. The valuation of preferred stock The formula for the valuation of a share of preferred stock is P0=D/rs. In this equation, the variable D represents the (A.Coupon Payment on the share/ B.Annual dividend paid on the share/ C.Share's current Value). Riley is considering the purchase of 350 shares of the preferred stock of Marston Manufacturing Company. The stock carries a par value of $100 per share and an annual dividend rate of 4.25%. Alternative investments of comparable risk are...
Nathan's Athletic Apparel has 1,700 shares of 5% , $100 par value preferred stock the company...
Nathan's Athletic Apparel has 1,700 shares of 5% , $100 par value preferred stock the company issued at the beginning of 2017 All remaining shares are common stock The company was not able to pay dividends in 2017, but plans to pay dividends of $18,000 in 2018. Required: 1. & 2. Ansuming the preferred stock is cumulative and noncumulative, how much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders...
3. Sweet Sixteen has two classes of stock authorized: $100 par value preferred and $1 par...
3. Sweet Sixteen has two classes of stock authorized: $100 par value preferred and $1 par value common. As of the beginning of 2018, 1,000 shares of preferred stock have been issued and 20,000 shares of common stock have been issued. The following transactions affect stockholders' equity during 2018: March 1 Issue 3,000 additional shares of common stock for $22 per share. April 1 Issue 5,000 additional shares of preferred stock for $110 per share. June 1 Declare a...
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of...
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $65 per share. The preferred shares pay dividends annually at a rate of 12%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 8% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid dividends on its preferred...
Potter's Violin Co. has just issued nonconvertible preferred stock with a par value of $100 and an annual dividend rate of 17.57 percent. The preferred stock is currently selling for $98.83 per share. Which rate of return does the investor expect to receive on this stock if the stock is purchased today? Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Nathan's Athletic Apparel has 1,700 shares of 5% , $100 par value preferred stock the company issued at the beginning of 2017 All remaining shares are common stock The company was not able to pay dividends in 2017, but plans to pay dividends of $18,000 in 2018. Required: 1. & 2. Ansuming the preferred stock is cumulative and noncumulative, how much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders...
Preferred stock valuation TXS Manufacturing has an outstanding preferred stock issue with a par value of $65 per share. The preferred shares pay dividends annually at a rate of 12%. a. What is the annual dividend on TXS preferred stock? b. If investors require a return of 8% on this stock and the next dividend is payable one year from now, what is the price of TXS preferred stock? c. Suppose that TXS has not paid dividends on its preferred...
Most questions answered within 3 hours.
-
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 18 minutes ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 49 minutes ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 2 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 2 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 3 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 4 hours ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 5 hours ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 5 hours ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 5 hours ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 5 hours ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 5 hours ago -
Given the information in the table, which of the following
statements is CORRECT?
Stock A
Stock...
asked 5 hours ago