Common shareholders legal-enforceable claims to dividends

Assignment Help Financial Management
Reference no: EM131013831

Folic Acid Inc., has $20 million in earnings, pays $2.75 million in interest to bondholders, and $1.80 million in dividends to preferred shareholders.

a. What are the common shareholders’ residual claims to earnings?

b. What are the common shareholders’ legal, enforceable claims to dividends?

Reference no: EM131013831

Questions Cloud

What is the continuous compounding two year zero rate : Consider a 2-year Treasury note with annual coupon rate 4% and the coupons are paid semiannually. The continuously compounded bond yield is 2% per year. What is the bond price? The price of a 2-year zero-coupon bond with face value $100 is $95. What ..
How you might reconcile the differences between identities : Compare and contrast the two identities. What are the similarities between the two? What are the differences?Explain how you might reconcile the differences between the two identities
Issue new bonds to finance its expansion plans : On January 1,, 2004, Pearce and Co. will issue new bonds to finance its expansion plans. Currently outstanding 9%, January 1, 2020 Pearce and Co. bonds are selling for 1,141. If interest is paid semi annually for both bonds, what must the coupon rate..
What is the government national mortgage association : What is the Government National Mortgage Association? How does this organization play a role in secondary mortgage markets?
Common shareholders legal-enforceable claims to dividends : Folic Acid Inc., has $20 million in earnings, pays $2.75 million in interest to bondholders, and $1.80 million in dividends to preferred shareholders. What are the common shareholders’ residual claims to earnings? What are the common shareholders’ le..
Find the time-average power required to be radiated : Find the time-average power required to be radiated by a Hertzian dipole in order to produce an electric field intensity of peak amplitude 0.01 V/m at a distance of 1 km broadside to the dipole.
Expected returns : Calculate the expected rate of return, rY, for Stock Y (rX = 11.20%.) Round your answer to two decimal places. %Calculate the standard deviation of expected returns, σX, for Stock X (σY = 19.82%.) Round your answer to two decimal places. %
A trader writes five naked put option contracts : A trader writes five naked put option contracts, with each contract being on 100 shares. The option price is $10, the time to maturity is six months, and the strike price is $64. a) What is the margin requirement if the stock price is $58? b) How wou..
What is the effect on the terms of the contract : A trader has a put option contract to sell 100 shares of a stock for a strike price of $650. What is the effect on the terms of the contract of:

Reviews

Write a Review

Financial Management Questions & Answers

  Treasury bonds currently have a nominal yield

Assume that 4-year Treasury Bonds currently have a nominal yield of 6.2%, and a 4-year Corporate Bonds have a nominal yield of 8.5%. If Maturity Risk Premium (MRP) on all 4-year contracts currently is 1.3%, and Corporate Bonds currently have addition..

  Maintain a positive operating ratio

An insurance company’s projected loss ratio is 77.5 percent, and its loss adjustment expense ratio is 12.9 percent. It estimates that commission payments and dividends to policyholders will add another 16 percent. What is the minimum yield on investm..

  Calculate the value of the real option

Calculate the value of the real option by waiting one year to decide and apart from real options, discuss 3 qualitative factors that the company should consider when making its decision on accepting the new project.

  Annual increase in the value of certificate

Suppose that in 2010, a $5 silver certificate form 1898 sold for 12,200. For this to have been true, what would the annual increase in the value of the certificate have been?

  Calculate the reorder point

Run First, Inc. uses 1000 units of Product X each year, on a continual basis. Product X has a fixed cost of $100 per order. There is a carrying cost of $1.50 per unit, per year. It takes 10 days for shipments to be received after an order is placed. ..

  What is the accounting break-even in units

A manufacture contemplates a change in technology that has fixes costs of $600,000, and depreciation expense of $100,000 (depreciation calculated as $1,000,000 of machinery, depreciated straight-line over 10 years is $100,000 per year (depreciation e..

  According to tax effect theory-investors prefer dividends

According to the tax effect theory, investors prefer dividends and, as a result, the higher the payout ratio, the higher the value of the firm. According to the dividend preference (bird-in-the-hand) theory, investors prefer cash to paper (stock), so..

  Calculate the profit per share for an investor

Calculate the profit per share for an investor that exercises a put option with a strike price of $60 when the stock is selling for $46 and the premium for the put option was $4.

  Firm reduced its net working capital investment

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $5.5 million, and the 2015 balance sheet showed long-term debt of $5.7 million. The 2015 income statement showed an interest expense of $180,000. Suppose you also know ..

  Debt features-loan agreement and restrictive covenant

Briefly explain the following debt features:  Loan Agreement. Restrictive Covenant.

  What is your initial cash flow

You hold a portfolio of stocks with a value of $1,000,000. You expect that you will be selling the stocks in the portfolio in one year. You are considering hedging your market risk by using the 1-yr S&P 500 Index Future. What side of the futures posi..

  Brokerage account-time to reach a financial goal

You have $44,524.78 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account totals $270,000. You expect to earn 12% annually on the account. How many years will it take to reach your goa..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd