Problem 14-04 You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred-dividend-earned ratio for the past three years from the following data taken from the firm’s financial statements: Year 20X1 20X2 20X3 Operating income $ 19,000,000 $ 17,000,000 $ 18,000,000 Interest 6,100,000 3,600,000 10,800,000 Taxes 4,600,000 4,600,000 4,900,000 Preferred dividends 1,100,000 1,500,000 1,000,000 Common dividends 2,100,000 2,900,000 — Round your answers to two decimal places. 20X1: 20X2: 20X3: What does your analysis indicate about the firm’s capacity to pay preferred stock dividends? Times preferred dividend earned has each year, which indicates the firm's capacity to pay the dividend has .
Problem 14-04 You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred-dividend-earned ratio for the past three years from the following data taken from the firm’s financial statements: Year 20X1 20X2 20X3 Operating income $ 19,000,000 $ 17,000,000 $ 18,000,000 Interest 6,100,000 3,600,000 10,800,000 Taxes 4,600,000 4,600,000 4,900,000 Preferred dividends 1,100,000 1,500,000 1,000,000 Common dividends 2,100,000 2,900,000 — Round your answers to two decimal places. 20X1: 20X2: 20X3: What does your analysis indicate about the firm’s capacity to pay preferred stock dividends? Times preferred dividend earned has each year, which indicates the firm's capacity to pay the dividend has .
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Problem 14-04
You are considering purchasing the
| Year | 20X1 | 20X2 | 20X3 | |||
| Operating income | $ | 19,000,000 | $ | 17,000,000 | $ | 18,000,000 |
| Interest | 6,100,000 | 3,600,000 | 10,800,000 | |||
| Taxes | 4,600,000 | 4,600,000 | 4,900,000 | |||
| Preferred dividends | 1,100,000 | 1,500,000 | 1,000,000 | |||
| Common dividends | 2,100,000 | 2,900,000 | — |
Round your answers to two decimal places.
20X1:
20X2:
20X3:
What does your analysis indicate about the firm’s capacity to pay preferred stock dividends?
Times preferred dividend earned has each year, which indicates the firm's capacity to pay
the dividend has .
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