Question

In: Accounting

Exxon Mobil has preferred shares with a yield of 5.14%. If the quarterly dividend is $1.92, what is the value of a share?


6. Exxon Mobil has preferred shares with a yield of 5.14%. If the quarterly dividend is $1.92, what is the value of a share?
7. You have accumulated $1,145 in debt by buying things on Amazon during quarantine.  The minimum monthly payment is $22, If you make only the minimum payment, it will take you 94 months to pay it off. How much total interest will you pay?
8. You are buying a house and will take out a 30-year mortgage of $577,105. If the interest rate is 4.33% per year, what will be your monthly payment?
10. You will invest $209.86 per month. If your investment will grow to $17,955.73 in 5 years, how much total interest did you earn?
11. Annuity A and B are exactly the same except that annuity A has an interest rate of 4% and annuity B has an interest rate of 5%, which one has the higher present value?

Solutions

Expert Solution

6
Preferred yield Dividend/Price of share
5.14% (1.92*4)/Price of share
5.14% 7.68/Price of share
Price of share 7.68/5.14%
Price of share $149.42
7
Total interest paid Total amount paid - Value of debt
Total interest paid (22*94) - $1145
Total interest paid 2068 - 1145
Total interest paid $923
8
Monthly payment Loan value/(1-(1+r^-n)/r)
r is monthly interest rate and n is number of payments
Monthly interest rate 0.36% 4.33%/12
No of payments 360 30*12
Monthly payment 577105/((1-(1.0036^-360))/0.0036)
Monthly payment 577105/201.3553
Monthly payment $2,866.10
10
Total interest earned Total investment value - Amount invested
Total interest earned 17955.73 - (209.86*5*12)
Total interest earned 17955.73 - 12591.60
Total interest earned $5,364.13
11
The higher the interest rate the lower is the present value.
Annuity A has lower interest rate of 4% then annuity B and thus would provide higher present value

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Exxon Mobil stock currently sells at $33.68 a share. The stockholders expect to get a dividend...
Exxon Mobil stock currently sells at $33.68 a share. The stockholders expect to get a dividend of $3 next year, and they expect that the dividend will grow at the rate of 3.5% per annum. The expected return on the market is 5% and the riskless rate is 3%. This morning Exxon announced that it has lost a legal battle with an adversary, and in response to the news, the stock went down to $30 a share. Find the beta...
A share of preferred stock pays a quarterly dividend of $1.00. If the price of the...
A share of preferred stock pays a quarterly dividend of $1.00. If the price of the stock is $50, what is the effective annual (not nominal) rate of return on the preferred stock?
Management action and stock value???REH? Corporation's most recent dividend was $ 1.92$1.92 per? share, its expected...
Management action and stock value???REH? Corporation's most recent dividend was $ 1.92$1.92 per? share, its expected annual rate of dividend growth is 55?%, and the required return is now 1515?%. A variety of proposals are being considered by management to redirect the?firm's activities. Determine the impact on share price for each of the following proposed actions. a.??Do? nothing, which will leave the key financial variables unchanged. b.??Invest in a new machine that will increase the dividend growth rate to 77?%...
What’s value of a preferred stock if we assume it has a quarterly dividend $1.25 per...
What’s value of a preferred stock if we assume it has a quarterly dividend $1.25 per share and the required rate of return is 10%? $5 $25 $50 $100 Other than dividend growth model, we can employ Market Multiple Analysis method for stock valuation. We suppose a firm's estimated earnings per share is $2. The average price to earnings (P/E) ratio for similarly publicly traded firms is 10. What's the firm's expected stock price? $25 $20 $22.5 $27
Given the information below for Exxon Mobil (XOM). Compute the expected share price at the end...
Given the information below for Exxon Mobil (XOM). Compute the expected share price at the end of 2021 using Only Price/EPS (PE) ratio analysis. Show your work 2017 2018 2019 2020 Price $      93 $      79 $      68 $      73 Revenues ($M) $ 404,552 $ 477,359 $ 310,586 $ 383,221 Net Income ($M) $    40,610 $    45,220 $    19,280 $    30,460 # of shares out (M)       5,000        5,000        5,000        5,000
Problem 8 A share of preferred stock has a par value of $100, an annual dividend...
Problem 8 A share of preferred stock has a par value of $100, an annual dividend of 2% and a current market price of $65.    Part 1 What is the rate of return on the preferred stock?
Maria Inc’s share capital consists of: 2,000 preferred shares outstanding, $6.50 per share dividend, and a...
Maria Inc’s share capital consists of: 2,000 preferred shares outstanding, $6.50 per share dividend, and a $100 stated (par) value; 5,000 common shares outstanding for which $300,000 was received. Assume that $88,000 is available for dividend distribution. Preferred shares have not been paid for the two Preceding years. Required: For each situation below, state how much of the $88,000 will be distributed to each share class. Pref erred shares are cumulative and non-participating (3 mark) Pref erred shares are cumulative...
There are 3,500 preferred shares outstanding of McDonalds stock with an annual dividend of $2 per share.
There are 3,500 preferred shares outstanding of McDonalds stock with an annual dividend of $2 per share. If McDonalds has not paid a preferred dividend in 6 quarters, how much does it need to pay to preferred shareholders in total before it is able to pay any common dividends? $10,500 $11,200 $14,800 $8,000
ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it...
ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it pays a dividend of $5 each year. What is the required rate of return on this stock, if the next dividend is going to be paid tomorrow? What if the most recent dividend was paid yesterday?
ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it...
ZZZ has preferred shares outstanding. The current price of each preferred share is $100 and it pays a dividend of $5 each year. What is the required rate of return on this stock, if the next dividend is going to be paid tomorrow? What if the most recent dividend was paid yesterday?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT