« previous next »

Author Question: Caldwell Corp. has outstanding borrowings. One of these borrowings is nonconvertible preferred stock ... (Read 68 times)

Mollykgkg

  • Hero Member
  • *****
  • Posts: 529
on: Jul 10, 2018
Caldwell Corp. has outstanding borrowings. One of these borrowings is nonconvertible preferred stock (cumulative) with a par value of 75 and an annual dividend rate of 8.25.
 
  This preferred stock is currently selling for 56.46 per share. What is the yield or return (r) on this preferred stock?
  A) 10.395
  B) 10.432
  C) 10.959
  D) 10.623

Question 2

The Bike Store orders 2000 worth of supplies every 30 days. If they take advantage of the 3/10 net 30 discount
  offered by their supplier, how much would they save over the year? Assume a 360-day year.
 
  What will be an ideal response?


jessicaduplan

  • Sr. Member
  • ****
  • Posts: 337
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: C
Explanation: C) We first determine the annual dividend by multiplying the dividend rate against the par value: 75  0.0825 = 6.1875. Now, using the equation r = and dividing the 6.1875 annual dividend by the current price of 56.46, we get r = 0.109591, or about 10.959.

Answer to Question 2

3  2000 = 60 would be saved on each order twelve 30-day periods in the year
12  60 = 720 would be saved over the year


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

In 2006, a generic antinausea drug named ondansetron was approved. It is used to stop nausea and vomiting associated with surgery, chemotherapy, and radiation therapy.

Did you know?

Blood is approximately twice as thick as water because of the cells and other components found in it.

Walter Thompson saw his assets evaporate during the stock market collapse in 1929. Desperate for ... Walter Thompson saw his assets evaporate during the stock market collapse in 1929. Desperate for ...
Newborns have a preferred head and arm orientation. Newborns have a preferred head and arm orientation.
Mixed Inhibitors, mixed enzyme preferred Mixed Inhibitors, mixed enzyme preferred
Create a soapy lather with the hands and spread the soap up to the elbows. Liquid soap is preferred. ... Create a soapy lather with the hands and spread the soap up to the elbows. Liquid soap is preferred. ...
ADHD (Stock photo) ADHD (Stock photo)
Video: Autonomic Nervous System Animation

For a complete list of videos, visit our video library