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JTM Enterprises has an issue of preferred stock with a par value of $200. The preferred stock pays a 7% dividend, and investors demand a 6.25% rate of return. Additionally, JTM Enterprises incurred $5,000 in maintenance costs last year. What price should the preferred stock sell for? Sunrise Retailers Ltd. has 6,500 shares of 7%, $25 par cumulative preferred stock, and 120,000 shares of $3 par common stock outstanding. Preferred dividends are 1 year in arrears. The board of directors has approved a $3.00 cash dividend on each share of common stock. The company also had a $2,000 legal settlement that does not affect dividends.

JTM Enterprises has an issue of preferred stock with a par value of $200. The preferred stock pays a 7% dividend, and investors demand a 6.25% rate of return. Additionally, JTM Enterprises incurred $5,000 in maintenance costs last year. What price should the preferred stock sell for? Sunrise Retailers Ltd. has 6,500 shares of 7%, $25 par cumulative preferred stock, and 120,000 shares of $3 par common stock outstanding. Preferred dividends are 1 year in arrears. The board of directors has approved a $3.00 cash dividend on each share of common stock. The company also had a $2,000 legal settlement that does not affect dividends.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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JTM Enterprises has an issue of preferred stock with a par value of $200. The preferred stock pays a 7% dividend, and investors demand a 6.25% rate of return. Additionally, JTM Enterprises incurred $5,000 in maintenance costs last year. What price should the preferred stock sell for? Sunrise Retailers Ltd. has 6,500 shares of 7%, $25 par cumulative preferred stock, and 120,000 shares of $3 par common stock outstanding. Preferred dividends are 1 year in arrears. The board of directors has approved a $3.00 cash dividend on each share of common stock. The company also had a $2,000 legal settlement that does not affect dividends.
Transcribed Image Text:JTM Enterprises has an issue of preferred stock with a par value of $200. The preferred stock pays a 7% dividend, and investors demand a 6.25% rate of return. Additionally, JTM Enterprises incurred $5,000 in maintenance costs last year. What price should the preferred stock sell for? Sunrise Retailers Ltd. has 6,500 shares of 7%, $25 par cumulative preferred stock, and 120,000 shares of $3 par common stock outstanding. Preferred dividends are 1 year in arrears. The board of directors has approved a $3.00 cash dividend on each share of common stock. The company also had a $2,000 legal settlement that does not affect dividends.
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