Answered: The entity received P7,580,000 cash…

The entity received P7,580,000 cash from the issuance of its 9%, 3-year P8,000,000 par value preference shares. How much is the cost of the preference shares using the following methods?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 7EB: Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the...

See similar textbooks

Related questions

Q: Suppose you currently own 3,000 shares of AZZ Incorporated stock that you purchased for S50 per shar...

A: Here, No. of Shares owned is 3,000 Purchase Price of Shares of $50 Selling Call Option at strike Pr...

Q: Financial Management Question Question THREE a) Why is finance described as the most important act...

A: Financial management can be defined as the management related to the employment and utilization of f...

Q: What ODE does the last function satisfy? Let the initial investment be $1000 andr=6%. Compute the va...

A: Initial investment is $1,000 Rate of interest is 6% To Find: Value of investment after 1 year. Valu...

Q: Consider the following investment alternatives: Investment Rate Compounding A 6.502% Annual Daily Qu...

A: The real interest that an investor earns on the investment and a borrower pays on the loan after con...

Q: Why are investors risk-averse? How can investors deal with different degrees of risk?

A: In the world of investment, the risk is price volatility. A volatile investment may either make you ...

Q: Prepaid Card Gift Card Peer-to-Peer Payment App Mobile Wallet a. A stores money that can be used to ...

A: Customers pay for a product or service using one of several payment methods. Cash, gift cards, credi...

Q: A man deposits P 1,000 at the end of each month for 3 years at a nominal rate of 12% compounded mont...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: Firms with higher expected growth opportunities usually sell for: Select one: O a. the same price ea...

A: Price-earnings multiple refers to the ratio of current market price to the Earnings per share of the...

Q: 5.ABC Company, a British company, expects to receive $10,000,000 in 30 days. It wants to hedge its f...

A: Forward contract is a an agreement between the two parties to sell and buy the underlying assets or ...

Q: On March 1, 2020 Giant Jumbo Clown Costumes borrowed money from Second Friendly National Bank by iss...

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for yo...

Q: Stock market analyst. Explain the mutual funds (structure; types; benefits; performance）

A: Mutual Funds: A mutual fund is a collection of money that represents the savings of a group of inves...

Q: Stock market analyst. Explain Types of share analysis to value a stock.

A: Stock market analysis is the method used by traders or investors for analyzing the decisions related...

Q: Jaafar owns an upscale fitness club in Jeddah. He wants to be protected if a customer is injured due...

A: The money paid in exchange for indemnification is known as a premium. Insurance is the protection ag...

Q: Describe the five variables like Stock Price, Exercise Price, Risk-Free Rate, Volatility or Standard...

A: The Black-Scholes model, frequently known as the Black-Scholes-Merton (BSM) model, is amongst the mo...

Q: It is a fact that teachers receive very meager salaries. Do you think this is an injustice? Explain ...

A: Teachers are the foundation of a nation's future as they educate children and guarantee a society of...

Q: lease solve the all and the long expalaining im needed max in 30 minutes and no reject thank u ...

A: Analyzing potential loss through the investment in stocks and taking appropriate actions to mitigate...

Q: Suppose that the average income in 1954 was 1,050£. Suppose further that the CPI in 1954 was 35.3, a...

A: Solution:- 2020 value of 1954 average income= (Average income in 1954 / CPI in 1954) x CPI in 2021

Q: Answer the next 4 questions using the information in the following table. You are considering the pu...

A: Bid price is the buying price at which the investors will buy the T bill. Ask price is the price at ...

Q: An investor has the opportunity to invest in four new retail stores. The amount that can be invested...

A: Net Present Value or NPV can be defined as the value determined by deducting the present value of ca...

Q: Calculate 1.04 as a ratio.

A: A ratio is a relationship between two variables that shows how much of one variable is contained in ...

Q: 3. Risk registers would normally detail which of the following: (Select all that apply.) A. Risk lev...

A: Risk registers are used to keep a track of the risks and other setbacks in a project and how to miti...

Q: How much should GlassilueCat invest in a fund to be able to withdraw $22.000 at the end of every 3 m...

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at ti...

Q: Weigh-in the advantages and disadvantages of leasing over debt financing in acquiring long-term asse...

A: Long-term assets are assets that will benefit the organisation for more than a year, whether they ar...

Q: Tori is dining out with some friends. The restaurant 1 cannot split the bill. Tori offers to pay for...

A: Prepaid cards, like debit and credit cards, can be used to make transactions and pay expenses. Becau...

Q: Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is ex...

Q: The report should contain the following : -Introduction about the banks -Reasons for merger - Advant...

A: Bank is a financial institution which helps in the wealth creation through investments. Also, banks ...

Q: A friend asks to borrow $47 from you and in return will pay you $50 in one year. If your bank is off...

A: The present value of money is the discounted value of future cash flows. The future value is the val...

Q: 1. What is the price of a $1,000 bond with a coupon payment of $50 annually if the bond matures in 2...

A: The price of the bond is equal to the present value of all the future coupon payments from the bond ...

Q: Using a bpmn modelling tool, model the control flow of a business process for modelling credit risk?...

A: The Business Process Modeling Notation (BPMN) is an open standard notation for graphical flowcharts ...

Q: Which of the following interprets the interest corage ratio of RED Merchandising?

A: Interest coverage ratio = operating profit/interest expense

Q: What is realized real interest rates? Give example.

A: realized real interest rate = nominal interest rate - actual inflation rate realized real interest ...

Q: Compare the results of the three methods by quality of information for decision making. Using what y...

A: The question is related to Capital Budgeting. The Net Present Value is the exess of Present Value of...

Q: How much must be invested now at 6% interest, compounded monthly, to accumulate $1,000 at the end of...

A: Present value = Future value/(1 + r)n OR Present value = Future value x (Present value facto...

Q: 3. Consider the following cash flow series. Determine the required annual deposits (end of year) tha...

A: Let the annual deposits = A Interest rate = 6% compounded monthly

Q: Why is finance described as the most important activity in any organization? Use relevant examples t...

A: Finance is required in all fields of life be it buying, selling, lending, procuring, producing and s...

Q: List four main tools or formulas used for doing calculation related loans and describe this method a...

A: A loan is when money is lent to another individual in exchange for repayment of the loan principle p...

Q: Disney issued a $10,000 Par, 4% Coupon bond that will mature in 20 years. Disney pays the annual int...

A: The current price of the bond is equal to the present value of all coupon payments and other amounts...

Q: Explain the call-put parity relation and how it is justified

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...

Q: Suppose that in 2015, a $10 silver certificate from 1898 sold for $11,700. For this to have been tru...

A: A Compound Annual Growth Rate(CAGR) is the method in which we calculate the total return from an inv...

Q: The fixed payment for a mortgage is P1 297.20. The original balance is P200 000.00. If the interest ...

A: The new balance of loan will be original balance minus principal payment

Q: The effective annual rate (EAR) for a savings account with a stated APR of 4% compounded daily is cl...

A: Effective Annual Interest Rate Effective annual interest rate refers to the actual rate of interest ...

Q: our cousin is currently 13 years old. She will be going to college in 5 years. Your aunt and uncle w...

A: Here we will need to use the concept of time value of money.

Q: town of Arrieta has decided to have an sculptor create a statue of their town founder, Arrieta Danie...

A: Present worth of all cost is considering the all cost and all maintenance cost and other all cost.

Q: Bob Jensen Inc. purchased a $580,000 machine to manufacture specialty taps for electrical equipment....

A: Initial Investment = $580,000 Discount Rate = 10% Time Period = 10 Years

Q: Which of the following are characteristics of consumer closed

A: answer statement 2 is false because no flexibility in timing , time is fixed. statement 5 is fa...

Q: The following cash flows are in actual dollars: Cash Flow (in Actual $) $25,000 4 35,000 45,000 7 55...

A: A constant dollar is the adjusted value which is used to compare the value of one period with that o...

Q: Determine by how much an ABC share/ or the ABC firm is over/(undervalued).

A: Solution: We know, Price- earnings ratio = Market value per share / Earnings per share It shows that...

Q: Which of the following statements is false? A. Moral hazard is the lack of incentive to guard ag...

A: Analysis of the options: A: Moral hazard is the lack of incentive to guard against risk where one ...

Q: inte

A: Given information : Loan amount $50,000.00 Interest rate 13% Time period 5

Q: e. Use equation below to calculate the present value of this stock. Po= Do(1+e) - D Assume that g - ...

A: As per the dividend growth model An investor in equity shares buys the shares at fixed fair price. T...

Question

REQUIREMENTS:

1. Interpolation method using multiplies of 1%

2. Yield-to-maturity formula

The entity received P7,580,000 cash from the issuance of its 9%, 3-year P8,000,000 par value preference shares. How much is
the cost of the preference shares using the following methods?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step by step

Solved in 5 steps with 6 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Silva Company is authorized to issue 5,000,000 shares of $2 par value common stock. In its IPO, the company has the following transaction: Mar. 1, issued 500,000 shares of stock at $15.75 per share for cash to investors. Journalize this transaction.
Juniper Company is authorized to issue 5,000,000 shares of $2 par value common stock. In conjunction with its incorporation process and the IPO, the company has the following transaction: Mar. 1, issued 4,000 shares of stock in exchange for equipment worth $250,000. Journalize the transaction.
Hyde Corporations capital structure at December 31, 2018, was as follows: On July 2, 2019, Hyde issued a 10% stock dividend on its common stock and paid a cash dividend of 2.00 per share on its preferred stock. Net income for the year ended December 31, 2019, was 780,000. What should be Hydes 2019 basic earnings per share? a. 7.80 b. 7.09 c. 7.68 d. 6.73
Cary Corporation has 50,000 shares of 10 par common stock authorized. The following transactions took place during 2019, the first year of the corporations existence: Sold 5,000 shares of common stock for 18 per share. Issued 5,000 shares of common stock in exchange for a patent valued at 100,000. At the end of Carys first year, total contributed capital amounted to: a. 40,000 b. 90,000 c. 100,000 d. 190,000
Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par value common stock at 15 per share (400,000 shares were authorized). During the period January 1, 2014, through December 31, 2019, Kent reported net income of 750,000 and paid cash dividends of 380,000. On January 5, 2019, Kent purchased 12,000 shares of its common stock at 12 per share. On December 28, 2019, 8,000 treasury shares were sold at 8 per share. Kent used the cost method of accounting for treasury shares. What is Kents total shareholders equity as of December 31, 2019? a. 3,290,000 b. 3,306,000 c. 3,338,000 d. 3,370,000