Answer:
c. $166.67 million
Explanation:
cost of expansion = new equity issued / (1 - flotation costs)
cost of expansion = $150 million / (1 - 10%) = $150 million / 90% = $166.67 million
Flotation costs increase the cost of equity, since they are an expense that decreases the net amount of money received by a corporation when it issued new stocks or new bonds.
Chaikin Money Flow is calculated by summing the ADs over the past _____ days and dividing that sum by the total volume over the past _____ days.
a. 14, 21
b. 21, 14
c. 14, 14
d. 21, 21
Answer:
d. 21, 21
Explanation:
The Chaikin Money Flow is a model (indicator) that was developed by Marc Chaikin in the 1980s and it is typically used by financial institutions or experts to monitor the volume-weighted average of accumulation and distribution of a stock for a specific period of time. Thus, the default or standard period for the Chaikin Money Flow is 21 days
Hence, Chaikin Money Flow is calculated by summing the average of the daily money flow (ADs) over the past 21 days and dividing that sum by the total volume over the past 21 days.
Suppose Americans decide to save more of their incomes. If banks lend this extra saving to businesses, which use the funds to build new factories, this leads to _______ (faster or slower) growth in productivity because workers will have _______ (more or less) equipment with which to work.
a) True or False: Only factory owners will benefit from the higher productivity because they will receive a return on their additional investment.
b) True or False: Society receives a "free lunch" when it builds new factories.
Answer:
a. False
b. False
Explanation:
Suppose Americans decide to save more of their incomes. If banks lend this extra saving to businesses, which use the funds to build new factories, this leads to faster growth in productivity because workers will have more equipment with which to work.
a. The benefits from higher productivity is received by every participants in the society, i.e., factory owners, in terms of increased profit, workers in terms of increased income (normally equal to value of marginal product).
b. The society doesn’t receive a “free lunch” because there is an inter-temporal trade-off between savings today and increased consumption tomorrow due to increased productivity.
Crawl Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2018. The board of directors declared and paid a $2,000 dividend in 2017. In 2018, $10,000 of dividends are declared and paid. What are the dividends received by the common stockholders in 2018
Answer:
total dividends distributed to common stock $6,000
dividends per common stock $0.12
Explanation:
preferred stock dividends = 1,000 x 6% x $50 = $3,000
since they are cumulative, if the dividends are not paid during one year, they must be paid in the next periods
the distribution of the $10,000 in dividends in 2018:
preferred dividends = $1,000 + $3,000 = $4,000common stock dividends = $6,000dividends per common stock = $6,000 / 50,000 = $0.12