Preferred

Alligator Corporation received a charter granting the right to issue 100,000 shares of $100 par value, 6% cumulative and nonparticipating preferred stock, and 1,000,000 shares of $1 par value common stock. It then Apr. 28 Jul. 16 Aug 6 Sep. 17 Dec. 31 Dec. 31 Issued 100,000 shares of common stock at $23 per share. Issued 6,000 shares of preferred stock to Thevenot Corporation for the following assets: equipment with a fair value of $76,000; a warehouse with a fair value of $240,000;

Current Financial Characteristics of CCI The motor carrier industry is highly regulated, resulting with high level of financial stability. Through government regulations, more specifically from the U.S Interstate Commerce Commission (ICC), Continental Carriers and others have received steady financial resource allocations and maintained steadily increasing profits with minimal fluctuations over the years. In addition, with the government’s tight entry control, the industry is able to create a

85% of the common stock and 100% of the preferred stock of Subsidiary Corporation. The common stock and preferred stock have adjusted bases of $500,000 and $200,000, respectively, to Parent. Subsidiary adopts a plan of liquidation on July 3 of the current year, when its assets have a $1 million FMV. Liabilities on that date amount to $850,000. On November 9, Subsidiary pays off its creditors and distributes $150,000 to Parent with respect to its preferred stock. No cash remain to be aid to Parent

reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution. 2. Considering Mary’s need of assurance, it is possible that Mary would prefer other forms, like bond or preferred share, which have more assurance to repay her investment. 3. Mary may need to get return on this investment before she gets dividends. Because Paula gets hold over 50% of stock, it is up to Paula to make the final decision about when the corporation

Acct 551 Final Exam(Possible Questions Answers http://www.homeworkwarehouse.com/downloads/acct-551-final-exampossible-questions-answers/ Acct 551 Final Exam(Possible Questions Answers 1. (TCO C) Redstone Company spent $190,000 developing a new process, $45,000 in legal fees to obtain a patent, and $91,000 to market the process that was patented. How should these costs be accounted for in the year they are incurred? 2. (TCO D) Total payroll of Watson Co. was $920,000, of which $160,000 represented

Participating preferred stock. T 12. Callable preferred stock. T 13. Restricting legal capital. F 14. Disclosing dividend policy. F 15. Affect of

Cox items for discussion 1. Why is Cox acquiring Gannett? Does it make sense at 2.7 billion. 2. Assuming the Gannett acquisition goes through, estimate CCI’s (1 ½ years) and long term (4 ½ years) funding needs. How much of each funding need must be met through external financing? 3. What constraints do they face in satisfying CCI’s funding needs? Assume a 65% floor on CCIs economic stake” 4. Analyze the proposed solutions. What is a Felines Prides security? What are the advantages/disadvantages

From Chapter 6 (Example 6.7), we know that the dividend on a share of preferred stock has zero growth and thus is constant through time. For a zero growth share of common stock, this implies that: D1 = D2 = D3 = D = constant So, the value of the stock is: |P0=

Chapter 8 Supplemental Homework/Practice Problems Solutions may be found on the FIN 380 site of i-Tunes U near the bottom of the file list under "Supplemental Homework - Chapter 8" 8-1. AEH, Inc. just paid a $1.00 dividend and is expected to pay a $1.06 dividend next year. What is AEH’s capital gains yield (growth rate, “g”)? 8-2. XYZ, Inc. stock sells for $50.00 and is expected to sell for $54.50 next year. What is XYZ’s capital gains yield (Hint: the percentage change in stock price is

of debt) + (% of preferred stock)(Cost of preferred stock) + (% of common equity) (Cost of common equity) =WdRd * (1-T) + WpsRps + WceRs Wd – the weights used for debt, Wps – the weights used for preferred equity, Wce – the weights used for common equity, rd – before-tax cost of debt, rps – cost of preferred stock, rs – cost of common equity, T – marginal tax rate B. Book weight of debt=long-term debt/ total capital=30.94% Book weight of preferred stock= Preferred stock / total capital=7