Answer:
Revision of Paragraph to Incorporate a Bulleted List
A high-powered MBA program costs hundreds of dollars an hour. However, our program covers the same information. That information includes the following:
O entrepreneurship tips as well as how to start a business,
O writing a business plan and understanding taxes,
O writing a marketing feasibility study, and
O employment benefits plans.
Explanation:
To correctly understand a bulleted list, it is important to differentiate it from a numbered list. Each bulleted paragraph is started with a symbol without the use of a number. This means that the list is not ordered in any particular order. On the other hand, a numbered list has a sequential or ordered number for each paragraph list.
An Uber driver faces costs for driving that include sunk costs like insurance that contribute $.50 to the average cost per mile. Yet when a rider offers to pay less than $0.50 per mile for a ride, the driver agrees because
Answer:
sunk costs like auto insurance (in this case) do not increase as driving increases
Explanation:
In the case when the uber driver faces cost for driving so the sunk cost such as insurance that contribute $0.50 but the other rider pay lower than $0.50 per mile so here the driver agrees as the sunk cost would not increased in the same way like driving rises.
Therefore the above represent the answer
Lakeesha bought 300 shares of stock at $48.25 per share. Her broker charges 3% commission for round lots and 4% for odd lots. Calculate the total cost of the stock purchase.
Answer:
$14909.25
Explanation:
Given :
Recall : A round lot is any number of shares that can be evenly divided by 100 while an odd lot is any number of shares between 1 and 100.
Therefore, 300 shares will be classified as a round lot.
Commission paid on round lot = 3%
Price per share = $48.25
Share price for 300 : ($48.25 * 300) = $14,475
Commission fee = 3% * 14475 = $434.25
Total cost of stock purchase :
$(14475 + 434.25)
= $14909.25
Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that at the optimal quantity for each firm. Furthermore, the quantity the firm produces in long-run equilibrium is the efficient scale. True or False: This indicates that there is a markup on marginal cost in the market for shirts. True
Answer:
Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact that P = ATC, P>ATC, MR =MC, or MR>MC at the optimal quantity. Furthermore, the quantity the firm produces in long-run equilibrium is the efficient scale. True False
This indicates that there is a markup on marginal cost in the market for shirts. True False
Explanation:
In the long run, monopolistically-competitive entities produce at a level where marginal cost and marginal revenue are equal. This makes it impossible for individual companies to sell their products at prices above the average cost. This situation means that monopolistically-competitive companies will always earn zero economic profit in the long run.
Cash Received from Customers—Direct Method Sales reported on the income statement were $480,000. The accounts receivable balance increased $54,000 over the year. Determine the amount of cash received from customers. $fill in the blank 1
Answer:
$426000
Explanation:
Cash = sales - account receivable
480000 - 54000 = $426000
Find the present value of $19,000 in 11 months at 5.1% interest
Answer:
$19,886.396
Explanation:
Given :
Interest rate = 5.1% = 5.1
Principal = $19000
Period = 11 months = (11/12)year
The present value of 19000 in 11 months at 5.1% interest Can be obtained using the relation:
PV = P(1 + r)^n
PV = 19000(1 + 0.051)^(11/12)
PV = 19000(1.051)^(11/12)
PV = 19000 * 1.0466524
PV = 19886.396
Hence, the present value is $19,886.396
Mutual fund A earned 10 percent while B earned 8 percent. The standard deviations of the returns were 10 percent and 7 percent, respectively. The risk free rate is 1%. According to the Sharpe ratio, which fund performed better
Answer:
Explanation:
The Sharpe ratio is given by:
(Return of portfolio - risk free rate) / standard deviation.
On July 1, Hartford Construction purchases a bulldozer for $228,000. The equipment has a 9-year life with a residual value of $16,000. Hartford uses the units-of-output method depreciation, and the bulldozer is expected to yield 26,500 operating hours.
Required:
(a) Calculate the depreciation expense per hour of operation.
(b) The bulldozer is operated 1,250 hours in the first year, 2,755 hours in the second year, and 1,225 hours in the third year of operations. Journalize the depreciation expense for each year.
Answer:
a. Depreciation expense per hour:
= (Cost - salvage value) / Expected operating hours
= (228,000 - 16,000) / 26,500
= $8 per hour
b. First year depreciation: Second year depreciation:
= 1,250 * 8 = 2,755 * 8
= $10,000 = $22,040
Third year depreciation:
= 1,225 * 8
= $9,800
Journal entries
Date Account Title Debit Credit
June 30, Year 1 Depreciation $10,000
Accumulated Depreciation $10,000
Date Account Title Debit Credit
June 30, Year 2 Depreciation $22,040
Accumulated Depreciation $22,040
Date Account Title Debit Credit
June 30, Year 3 Depreciation $9,800
Accumulated Depreciation $9,800
Bloom Company management predicts that it will incur fixed costs of $251,000 and earn pretax income of $365,100 in the next period. Its expected contribution margin ratio is 61%. Required: 1. Compute the amount of total dollar sales. 2. Compute the amount of total variable costs
Answer and Explanation:
The computation is shown below;
a. The amount of the total dollar sales is
Pretax income = Sales value - Variable cost - Fixed cost
where,
Sales value - variable cost = Contribution margin
$365,100 = Contribution margin - $251,000
So,
Contribution margin = $616,100
Now
Contribution margin = Sales value × Contribution margin ratio
$616,100 = Sales value × 61%
So,
Sales value = $1,010,000
b. The total variable cost is
= Sales - fixed cost - pre tax income
= $1,010,000 - $251,000 - $365,100
= $393,900
The GASB requires governments to present budgetary comparisons in their external annual financial statements (either as an additional financial statement or as schedules in required supplementary information). What does the GASB require these statements/schedules to include
Answer:
The GASB requires these statements/schedules to include:
1. budgetary comparisons for the activities that are reported in the general fund and each major special revenue fund.
2. schedules showing the original budget, the final appropriations budget, and actual inflows, outflows, and balances on a budgetary basis.
Explanation:
The purpose of GASB section 34 is to improve the financial transparency of state and local governments' fiscal reports. It also increases governmental accountability, making it possible for citizens to participate in deciding operating budgets of their states and local governments.
Navistar Trucking has adopted a new approach to capital budgeting. What is the fundamental way in which the new approach differs from the traditional approach
Answer:
They use a capital budgeting approach that has a bigger planning cycle, also focus is on shareholder value
Explanation:
Navistar Trucking adopted capital budgeting accounting system. This entails estimating if the price being paid for long term investments in projects and equipment is worthwhile.
Methods like internal rate of return, payback period, and net present value are used to assess value of investment.
Navistar trucking plans its capital budgeting in 5-10 years unlike traditional approach that does so every year.
Also focus is on increasing the value of shareholders over time.
A certain machine will have a cost of $25,000 (then $) six years from now. Find the PW of the machine if the real interest rate is 10% per year and the inflation rate is 5% per year using (a) constant-value dollars, and (b) then-current dollars.
Answer:
The Present Worth of the machine if the real interest rate is 10% per year and the inflation rate is 5% per year, using:
(a) constant-value dollars
= $10,518.60
(b) then-current dollars
= $10,818.65
Explanation:
a) Data and Calculations:
Cost a certain machine six years from now = $25,000
Time period = 6 years
Real interest rate = 10%
Inflation rate = 5%
Nominal interest rate = 5% (10% - 5%)
Discount factor at 10% for 6 years = 0.564
Discount factor at 5% for 6 years = 0.746
PW using:
a) Constant-value dollars = $18,650 ($25,000 * 0.746)
PW = $10,518.60 ($18,650 * 0.564)
b) Then-current dollars:
The nominal rate = 0.1 + 0.05 + (0.1 * 0.05) = 0.155
$10,818.65 ($25,000 * 0.432746)
Nike has so far had $30,000,000 in losses at its shoe factory in Vietnam in 2017. The additional revenue that it will earn from producing an additional shoe is $100 while the additional cots incurred for that additional shoe is $99.99. Should Nike continue operations in that factory and produce that additional shoe
Answer: c. Yes, because the marginal revenue from producing the additional shoe is greater than the marginal costs.
Explanation:
When making financial decisions, companies abide by the principle of Sunk Costs. This means that money that has already been spent, should not have any effect on future financial decisions. The $30 million that has been lost already will therefore not be considered.
The only figures now are the additional cost and revenue. The additional revenue is more than the additional cost so this shoe should be produced because it brings in a profit of $0.01.
Samantha Rose Inc. made a $25,000 sale on account with the following terms: 1/15, n/30. If the company uses the net method to record sales made on credit, how much should be recorded as revenue
Answer:
$24,750
Explanation:
The computation of the amount that should be recorded is shown below"
Sales on account = $25,000
Credit term = 1/15, n/30
Sales discount rate = 1%
Now
Sales discount = Sales on account × Sales discount rate
= 25,000 × 1%
= $250
So,
Net sales = Sales- Sales discount
= $25,000 - $250
= $24,750
Hot Shot Delivery Inc. provides the following year end data:
2020 2019
Cash $65,000 $38,000
Accounts Receivable 60,000 39,000
Merchandise Inventory 66,000 26,000
Property, Plant & Equip 219,000 154,000
Total Assets 410,000 257,000
Sales Revenue $530,000
Cost of Goods Sold 180,000
Interest Expense 30,000
Net Income 112,000
Calculate the rate of return on total assets for 2018.
a. 55.3%.
b. 52.5%.
c. 42.6%.
d. 27.3%.
Answer:
c. 42.6%
Explanation:
Average total assets = $410,000+$257,000/2
Average total assets = $667,000
Average total assets = $333,500
Net income = $112,000
Interest expenses = $30,000
Return on total assets = Net income + Interest expenses / Average total assets
Return on total assets = $112,000 + $30,000 / $333,500
Return on total assets = 0.42388060
Return on total assets = 42.39%
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 40 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 35 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). The amount of the tax on a bottle of wine isper bottle. Of this amount, the burden that falls on consumers isper bottle, and the burden that falls on producers isper bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
Answer and Explanation:
The computation is shown below:
The amount of the tax for the wine bottle is
= $9 per bottle - $6 per bottle
= $3 per bottle
Before the tax, the price per bottle is $7 per bottle
The Tax burden on consumers is
= $9 - $7
= $2 per bottle
And, the tax burden on producers is
= $7 per bottle - $6 per bottle
= $1 per bottle
So, the given statement is false as the impact would remain the same whether it is for producer or consumer
The following information is available for Culver Corporation. 2022 2021 Current assets $ 64,500 $ 40,300 Total assets 243,000 208,000 Current liabilities 25,000 32,500 Total liabilities 65,610 76,960 Net income 82,600 49,925 Net cash provided by operating activities 92,600 58,600 Preferred dividends 6,685 6,685 Common dividends 5,600 4,100 Expenditures on property, plant, and equipment 29,600 14,600 Common shares outstanding at beginning of year 42,500 32,600 Common shares outstanding at end of year 78,000 42,600 (a) Compute earnings per share for 2022 and 2021 for Culver. (Round Earnings per share to 2 decimal places, e.g. $2.78.)
Answer and Explanation:
The earning per share for 2022 and 2021 is presented below:
For the year 2022
= ($82,600 - $6,685) ÷ (42,500 + 78,000) ÷ 2
= ($75,915) ÷ (60,250)
= 1.26
For the year 2021
= ($49,925 - $6,685) ÷ (32,600 + 42,600) ÷ 2
= ($43,240) ÷ (37,600)
= 1.15
The same should be considered and relevant
You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. You suspect that _____ Blu-ray players shifts to the _____. demand for; left supply of; left demand for; right supply of; right
Answer:
supply of; right
Explanation:
When the supply curve shifts rightward, there would be a rightward shift of the supply curve. As a result of the rightward shift, supply would increase and the price falls.
When the price of a good falls, the quantity demanded increases. This is in line with the law of demand.
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
Thus, when the price of blue ray players fall, there would be an increase in the quantity of demanded. there would a movement down along the demand curve.
considers the problem of building railway tracks under the assumption that pieces fit exactly with no slack. Now consider the real problem, in which pieces don’t fit exactly but allow for up to 10 degrees of rotation to either side of the "proper" alignment. Explain how to formulate the problem so it could be solved by simulated annealing
Answer:
By using simulated annealing we will sample the next state, evaluate and take the next state according to the probability e^Δv
Value function ( V ) = ( a * number of gaps ) + ( b * number of misconnected pieces ) + ( c * sum of sizes of gaps )
a,b,c = adjustable
Explanation:
In order to solve this problem by simulated annealing
First condition : assuming that pieces of the railways tracks fit exactly with no slack
Assume a state configuration of 32 pieces, use of discrete operations whose function is to remove pieces and reconnect it somewhere else without slack , we will also consider a continuous operations to help change angles to real values
Second condition : considering a real problem
This condition can be considered to be a closed loop because when one joint is moved all other joints are moved, here we will consider using a heuristic function
By using simulated annealing we will sample the next state, evaluate and take the next state according to the probability e^Δv
Value function ( V ) = ( a * number of gaps ) + ( b * number of misconnected pieces ) + ( c * sum of sizes of gaps )
a,b,c = adjustable
A DuPont analysis is conducted using the DuPont equation, which helps to identify and analyze three important factors that drive a company’s ROE. According to the equation, which of the following factors directly affect a company’s ROE? Check all that apply. Total Assets / Total Common Equity Net Income / Sales Price per Share / Earnings per Share
Answer:
Total Assets / Total Common Equity
Explanation:
Depend upon theDu Pont Equation,
The following formula should be used
ROE = Net profit margin × Total asset turnover × Equity multiplier
And,
ROE = (Net profit ÷ Sales) × (Sales ÷ Total Assets) × (Assets ÷ Equity)
So as per the above formula, the above answer should be considered
The following static budget is provided: Units 22,000 Units Sales $ 220,000 Less variable costs: Manufacturing costs $ 77,000 Selling and administrative costs $ 50,600 Contribution margin $ 92,400 Less fixed costs: Manufacturing costs $ 26,400 Selling and administrative costs $ 20,900 Net income $ 45,100 What will budgeted net income equal if 20,000 units are produced and sold
Answer:
$43,064
Explanation:
Sales $220,000 / 22,000 × 20,000
$200,000
Variable costs $77,000 / 22,000 × 20,000
($63,636)
Selling and admin $50,600 / 22,000 × 20,000
($46,000)
Manufacturing cost fixed
($26,400)
Selling and admin fixed
($20,900)
Net income
$43,064
Therefore, budgeted net income will equal $43,064 if 20,000 units are produced and sold.
A farmer is considering the installation of a fuel storage system that will save $0.065 per gallon because the fuel can be purchased in bulk. The farmer uses about 20,000 gallons per year. The system will cost $10,000 to install. The annual operating and maintenance cost will be nothing in the first year but will increase by $25 each year thereafter. After ten years that the system will be used it will have a salvage value of $3,000. The Farmer
The farmer's cost of funds is 12%. What is the equivalent uniform annual benefit for the fuel storage system?Based on this analysis, should the farmer purchase the fuel storage?
Answer:
yes and because yes
Explanation:
How jse reported the negative impact of the coronavirus on the economic conditions
Answer:
C
Explanation:
sorry if im wrong tried my best
National Furniture Company has 25,000 shares of cumulative preferred 2% stock, $75 par and 200,000 shares of $10 par common stock. The following amounts were distributed as dividends: Year 1 $25,000 Year 2 88,000 Year 3 95,500 Determine the dividends per share for preferred and common stock for each year. If an answer is zero, enter '0'. Round all answers to two decimal places.
Answer:
Year 1
Preferred Dividend = $25,000
Common Stock Dividend = $0
Year 2
Preferred Dividend = $37,500
Common Stock Dividend = $50,500
Year 3
Preferred Dividend = $25,000
Common Stock Dividend = $70,500
Explanation:
The dividends per share for preferred and common stock for each year.
Preferred Dividend
Is a fixed charge. When it is cumulative, all dividends in arrears are accumulated an paid in future when funds become sufficient before other dividends are paid.
Preferred Dividend = 25,000 x $75 x 2 % = $37,500
Common Stock Dividend
Holders of Common Stock receive their dividends after the Preferred Stock holders have received their dividends.
Calculations
Year 1
Preferred Dividend = $25,000 (owing $12,500)
Common Stock Dividend = $0
Year 2
Preferred Dividend = $25,000 + $12,500 (owing ) = $37,500
Common Stock Dividend = $88,000 - $37,500 = $50,500
Year 3
Preferred Dividend = $25,000
Common Stock Dividend = $95,500 - $25,000 = $70,500
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,000,000 $ 14,000,000 $ 25,000,000 Average operating assets $ 3,000,000 $ 7,000,000 $ 5,000,000 Net operating income $ 600,000 $ 560,000 $ 800,000 Minimum required rate of return 14% 10% 16% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity
Answer:
1. See part 1 below for the calculations.
2. We have:
Division A's Residual Income (loss) = $180,000
Division B's Residual Income (loss) = ($140,000)
Division C's Residual Income (loss) = $0
3.a. Only Division B will probably accept the investment opportunity.
3.b. Divisions A and B will probably accept the investment opportunity.
Explanation:
Note: This question is not complete as the part 3-b of the requirement is omitted. The question is therefore completed before answering the question by providing the part 3-b as follows:
b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?
The explanation of the answer is now provided as follows:
The following are given:
Division A Division B Division C
Sales $12,000,000 $14,000,000 $25,000,000
Average operating assets $3,000,000 $7,000,000 $5,000,000
Net operating income $600,000 $560,000 $800,000
Min. req'd rate of return 14% 10% 16%
1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover.
The relevant formulae are as follows:
Margin = Net Operating Income / Sales
Turnover = Sales / Average Operating Assets
Return on Investment = Margin * Turnover
Therefore, we have:
Division A:
Margin = $600,000 / $12,000,000 = 0.05, or 5%
Turnover = $12,000,000 / $3,000,000 = 4 times
Return on Investment = 5% * 4 = 0.20, or 20%
Division B:
Margin = $560,000 / $14,000,000 = 0.04, or 4%
Turnover = $14,000,000 / $7,000,000 = 2 times
Return on Investment = 4% * 2 = 0.08, or 8%
Division C:
Margin = $800,000 / $25,000,000 = 0.032, or 3.20%
Turnover = $25,000,000 / $ 5,000,000 = 5 times
Return on Investment = 3.2% * 5 = 0.16, or 16%
2. Compute the residual income (loss) for each division.
The following is the formula to use:
Residual Income (loss) = Net Operating Income - (Minimum Required Return * Average Operating Assets)
Therefore, we have:
Division A's Residual Income (loss) = $600,000 - (14% * $3,000,000) = $180,000
Division B's Residual Income (loss) = $560,000 - (10% * $7,000,000) = ($140,000)
Division C's Residual Income (loss) = $800,000 - (16% * $5,000,000) = $0
3-a. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by ROI, which division or divisions will probably accept the opportunity?
If a division's Return on Investment (ROI) is less than 15%, the decision criterion is to accept the investment opportunity. Otherwise, it will be rejected. Therefore, only Division B is will probably accept the investment opportunity, based on the results of Part 1 above. Division A and C will reject it.
3-b. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?
The decision criterion is for a division to accept the investment opportunity if its minimum required rate of return is lower than 15%. Otherwise, it will be rejected.
Based on the information in the question, Divisions A and B will probably accept the investment opportunity. Division C will reject it.
The price elasticity of demand measures: Group of answer choices how responsive consumers are in the quantity they want when consumer incomes change how responsive producers are in the quantity they produce when the price changes how responsive consumers are in the quantity they want when the price changes how responsive producers are in the quantity they produce when consumer incomes change
Answer:
how responsive consumers are in the quantity they want when the price changes
Explanation:
The price elasticity of demand is
= Percentage change in quantity demanded ÷ percentage change in demand
So based on the above formula it shows that the consumers are responsive with regard to the quantity they need at the time when the price is changed
Therefore the above represent the answer
Answer:
Price
Inelastic
Elastic
Explanation:
got it right on edg
Assume Peanut Butter and Jelly are two complement products. For both markets explain what happens for an increase in the Supply of Jelly to both the Peanut butter and Jelly markets.
Answer:
Complementary goods are goods that are consumed together
If the supply of Jelly increases, the supply curve for jelly shifts rightward. As a result of the rightward shift, price decreases and quantity increases.
Because jelly and peanut butter are complements, an increase in the supply leads to an increase in the supply of peanut butter.
the supply curve of peanut butter shifts outward also. As a result of the rightward shift, price decreases and quantity increases.
Explanation:
A complimentary service or product is one that is employed in connection with just another good or service. When ingested solo, the complement product is usually of little or no value. If a commodity has a positive connection with another product, it is considered complimentary.
The supply curve for jelly goes rightward as the supply of jelly increases. Price drops and quantity volume increases of the rightward shift. Because jelly and peanut butter complement one other, an increase in jelly availability leads to an increase in peanut butter supply. Peanut butter's supply curve is also shifting outward. Price decreases and quantity increases as a result of the rightward shift.
The cross-price elasticity of demand is equal to 2 and larger than 1, indicating that demand is elastic and positive since wheat and rice are complimentary items, and as the price of wheat rises, so does the demand for rice.
To know more about the complementary goods, refer to the link below:
https://brainly.com/question/1240785
Company Company A Company B Forecasted return 7% 11% Standard deviation of returns 8% 23% Beta 1 3 The market risk premium is 6% and the risk-free rate is 3%. Using Capital Asset Pricing Model (CAPM), will you invest in the companies
Answer and Explanation:
The computation is shown below:
As we know that
Required rate of return = Risk Free Rate + Beta × (Market Return -Risk Free Rate)
For company A
= 3% + 1 × 6%
= 9%
For Company B
= 3% + 3 × 6%
= 21%
As we can see that the forecast return should be lower than the required return so we should not invest in company A also the same is done in company B too
Therefore we dont invest in any of the company
In the liquidation of a partnership, any partner who has a capital deficiency Group of answer choices has a personal debt to the partnership for the amount of the deficiency. is automatically terminated as a partner. will receive a cash distribution only on the basis of his or her income-sharing ratio. is not obligated to make up the capital deficiency.
Answer: A. has a personal debt to the partnership for the amount of the deficiency
Explanation:
Partnership is a form of business whereby two or more people come together and manage an organization together.
Capital deficiency refers to when there's a debit balance in the capital account of a partner after the allocation of gain or loss.
In the liquidation of a partnership, any partner who has a capital deficiency has a personal debt to the partnership for the amount of the deficiency.
All of the following assets require a title as proof of ownership, except: Group of answer choices Life insurance. Boat. Home. Vehicle.
Answer:
Life insurance.
Explanation:
A life insurance policy can be defined as a contract between a policyholder and an insurer, in which the insurer agrees to pay an amount of money to a specific beneficiary either upon the death of the insured person (decedent) or after a set period of time.
All of the following assets such as home, boat, vehicle require a title as proof of ownership, except a life insurance because no one person can present a proof to attest to the ownership of their life.
Simply stated, a life of an individual is abstract and as such can not be quantified or qualified by any document as a proof to be presented to another person or business entity. Thus, a life insurance cannot be used as a collateral to obtain credits or loans from a financial institution or investors.
Test Tech has preferred stock outstanding that pays an $10.85 annual dividend. It price is $125. What is the required rate of return on the preferred stock
Answer:
8.7%
Explanation:
Calculation to determine the required rate of return on the preferred stock
Using this formula
Required rate of return=Annual dividend/Price
Let plug in the formula
Required rate of return=$10.85/$125
Required rate of return=0.087*100
Required rate of return=8.7%
Therefore the required rate of return on the preferred stock is 8.7%
