Imagine yourself as a financial manager in a company, and you are requested to provide a financial report including the calculation of the current market rate of return from the investor's perspective for each of the four investment options, taking into consideration the followings: Common stocks available for investment are: 2,500,000 shares of common stock, with a par balance of $1 per share. The current market value of the common share is $24.43 per share. Annual earnings per share $1.95. Bonds available for investment $1,750,000 bonds (A) with an interest of 6.25%, with a current market value of $104 per bond (price of $104 per $100). $2,250,000 Notes B, with an interest rate of 5.75%, with a current market value of $94.50 (price $94.50 per $100 note). The corporate tax rate is 35%. Preferred shares available for investment 950,000 outstanding preferred shares with a par value of $10 with a preferential dividend payment set at 5%. The current market value is $15.63 per Preferred Share
Imagine yourself as a
Common stocks available for investment are:
2,500,000 shares of common stock, with a par balance of $1 per share.
The current market value of the common share is $24.43 per share.
Annual earnings per share $1.95.
Bonds available for investment
$1,750,000 bonds (A) with an interest of 6.25%, with a current market value of $104 per
$2,250,000 Notes B, with an interest rate of 5.75%, with a current market value of $94.50 (price $94.50 per $100 note).
The corporate tax rate is 35%.
Preferred shares available for investment
950,000 outstanding preferred shares with a par value of $10 with a preferential dividend payment set at 5%. The current market value is $15.63 per
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