What is the value of each preference share

Assignment Help Accounting Basics

Reference no: EM132794536

Questions -

Q1. Ryza Tatlonghari wants to buy 5,000 preference shares, P150 par value from Mawon Lim. According to her sources, the preference shares come with a constant dividend of P42 per share. Ryza intends to hold the preference shares long-term and has no plans on selling them soon. Moreover, she requires a 12% return on all his investments. What is the value of each preference share?

Q2. Rachelle Ching is an investment analyst. She was asked by Macrille Samson, an investor, to assess the viability of an investment in Consti Corp. Macrille expects to hold the investment for five (5) years and sell it at the end of the holding period. Rachelle forecasted that Consti Corp. will pay the following dividends:

Year Dividend per Share

5 P3.60

4 3.48

3 3.22

2 2.98

1 2.50

Rachelle expects that at the end of the third year, the selling price of the company's stock will be P125 per share. She also estimated that the cost of capital is 5%. The current stock price is P150 per share. What is the value of the shares?

Reference no: EM132794536

Questions Cloud

What are the yearly holding and setup costs : Number 2 pencils at the campus bookstore are sold at a fairly steady rate of 60 per week. The pencils cost the bookstore 2 cents each and sell for 15 cents each

What is the ownership percentage of the vc after investment : Find What is the ownership percentage of the VC? Assume the preferred stock is participating. At an exit value of $16,000,000, what is the payoff to the VC?

What is the implied goodwill : The cumulative earnings for the past five years are $ 600,000 including non-recurring losses of $ 100,000. What is the implied goodwill

Background information needed for the executive summary : 1. What is the necessary background information needed for the executive summary? Who are the stakeholders?

What is the value of each preference share : Ryza Tatlonghari wants to buy 5,000 preference shares, P150 par value from Mawon Lim. What is the value of each preference share

Prepare the journal entry for a stock split : Prepare the journal entry for a 2:1 stock split when there were 100,000 common shares outstanding, par value is $2 per share and selling price is $20 per share

Will the company purchase the pinball machines : Assume that Nick's Novelties, Inc. will not purchase new equipment unless it provides a payback period of 4 years or less. Will the company purchase the pinball

Compute the retained earnings balance on September : The following information pertains to Rudolph Corp. for the year ended September 30, 2022. Compute the retained earnings balance on September 30, 2022

What would clean-up maximum operating income be per month : Assuming that direct labor cost can be reduced by $2 per unit, what would Clean-Up's maximum operating income be per month?

User Account

All Pages