Question

Companies that have preferred shareholders promise to pay a stated dividend for an infinite period. Preferred stock is treate

Please only answer if you know, thank you.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

1)

Preferred dividend = 9.20% of 100 = 9.2

Value of stock = Preferred dividend / required rate

Value of stock = 9.2 / 0.1233

Value of stock = $74.62

2)

New value = 9.2 / 0.1603

New value = $57.39

Add a comment
Know the answer?
Add Answer to:
Please only answer if you know, thank you. Companies that have preferred shareholders promise to pay a stated dividend...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period....

    Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders...

  • Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period....

    Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders receive...

  • Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock...

    Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders...

  • 12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend...

    12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar...

  • SUNSTORE Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite...

    SUNSTORE Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders...

  • 12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend...

    12. Valuing preferred stock Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar...

  • Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period....

    Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is treated like a perpetuity if the payments last forever. Preferred stocks are considered to be a hybrid of a common stock and a bond. For example, one of the major differences between preferred shares and bonds is that the issuing companies can suspend the payment of their preferred dividends without throwing the company into bankruptcy. However, similar to bonds, preferred stockholders...

  • 11. More on the corporate valuation model Aa Aa Acme Corp. is expected to generate a...

    11. More on the corporate valuation model Aa Aa Acme Corp. is expected to generate a free cash flow (FCF) of $10,175.00 million this year (FCF1$10,175.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF2 and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF4). If Acme Corp.'s weighted average cost of capital (WACC)...

  • Please show all the work! Thank you so much! The following is the Shareholders Equity section...

    Please show all the work! Thank you so much! The following is the Shareholders Equity section of the BillyBoB Corporation at December 31, 2017: Preferred Stock, 10% annual dividend, $40 par, 100,000 shares authorized, 7,000 shares issued& outstanding280,000 Common Stock, $5 par, 750,000 shares authorized, 112,000 issued & outstanding.. Paid-In Capital in excess of par on preferred...70,000 Paid-In Capital in excess of par on common210,000 560,000 Retained Earnings 1,280,000 January 20, 2018 BillyBoB Corp issued 38,000 shares of common stock...

  • Answer in this format please thank you!! Problem 13-5A Computing book values and dividend allocations LO...

    Answer in this format please thank you!! Problem 13-5A Computing book values and dividend allocations LO C2, A4 [The following information applies to the questions displayed below.] Raphael Corporation's balance sheet shows the following stockholders' equity section. $ 55,000 Preferred stock-5% cumulative, $ par value, 1,000 shares authorized, issued, and outstanding Common stock-$_ par value, 4,000 shares authorized, issued, and outstanding Retained earnings Total stockholders' equity 140,000 310,000 $ 505,000 Problem 13-5A Part 1 1. What are the par values...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT