if you invest $100 at a stated annual rate of 10 percent compounded quarterly, how much more money will you have in 10 years than if the rate was compounded annually?

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Answer 1

The formula to calculate the future value of an investment with compound interest is: FV = PV * (1 + r/n)^(nt)

To calculate the future value of an investment of $100 with an annual interest rate of 10% compounded quarterly:

Calculate the interest rate per quarter: r/n = 0.10/4 = 0.025

Calculate the number of compounding periods: nt = 4 * 10 = 40

Apply the formula: FV = PV * (1 + r/n)^(nt)

Substitute values into the formula: FV = $100 * (1 + 0.025)^40

Calculate the future value: FV = $100 * 2.594 = $259.40

To calculate the future value of the same investment with the interest rate compounded annually:

Calculate the interest rate per year: r = 0.10Calculate the number of compounding periods: t = 10Apply the formula: FV = PV * (1 + r)^t

Substitute values into the formula: FV = $100 * (1 + 0.10)^10

Calculate the future value: FV = $100 * 2.59374 = $259.37

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Related Questions

if the government were to limit the release of air-pollution produced by a steel mill to 75 parts per million, the policy would be considered a

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if the government were to limit the release of air pollution produced by a steel mill to 75 parts per million, the policy would be considered a regulation.

A regulation is a law or other instrument used by the government to restrict, direct, or otherwise manage social conduct. Regulation has several different connotations that cannot be reduced to a single idea.

Regulation in the context of the public policy refers to the adoption of specific regulations that are usually supported by a powerful enforcement mechanism. As a result, for a very long time, the study of regulation has been associated with the study of the autonomous bodies enforcing it, for instance in the United States.

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in the market for shoes, there is a leftward shift in demand and a leftward shift in supply. how will this affect price and quantity, respectively?

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When both demand and supply shift to the left, this typically results in an increase in both price and quantity.

A leftward shift in demand means that, at every given price, consumers are now willing to purchase fewer units of the good.

Conversely, a leftward shift in supply means that, at every given price, producers are now willing to supply fewer units of the good.

When the quantity demanded decreases and the quantity supplied decreases, this creates upward pressure on the price.

In order to balance the market, the price will likely rise, and the quantity traded will likely decrease. In this situation, the new market equilibrium will have a higher price and a lower quantity than the previous market equilibrium.

The exact magnitude of the changes in price and quantity will depend on the specific shift in demand and supply and the elasticity of each curve.

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which of the following is not a myth about entrepreneurs? a. entrepreneurs are born, not made. b. entrepreneurs must be inventors or designers. c. there is not a standard profile or prototype for an entrepreneur. d. all an entrepreneur needs is luck.

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It is not a fiction that there is no typical entrepreneur profile or prototype; hence, choice (c) is the appropriate response.

Various entrepreneurial myths

Myth 1: Business owners don't think before they act.

Myth 2: Entrepreneurs are not made, but rather born

Myth 3: Academicians are entrepreneurs.

Myth 4: All you need is money to be an entrepreneur

Myth 5: All it takes to succeed as an entrepreneur is chance

Myth 7: Entrepreneurs strive for achievement yet encounter high. Myth 6: For such an entrepreneurial, knowledge is wonderful.

Who are business owners?

In order to turn an innovation together into successful business, an entrepreneur must first gather and afterwards combine all the required resources (cash, people, a workable marketing strategy, a plan of action, and indeed the capacity for taking risks).

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risk and return go together. cash isn't very risky but has next to no return. in fact, the cash in your wallet is losing value due to inflation. which option could you pick to take on the smallest amount of risk and still earn some interest for your emergency fund?

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A certificate of deposit is a type of savings product that accrues interest on a single sum of money for a fix amount of time. CDs take on the smallest amount of risk and provide interest for your emergency fund.

A certificate of deposit (CD) is a type of savings account where the issuing bank pays interest in exchange for holding a specified sum of money for a predetermined length of time, such as six months, a year, five years. You will receive the amount you initially invested plus any income when you pay in or redeem your CD. One of the safest ways to save money is using certificates of deposit. A CD purchased from a bank that is federally insured is covered up to $250,000 in loss. Not each CD or accounts you have at the bank, but all accounts under your name at that bank are covered by the $250,000 insurance. Although the customer who opens a CD might get a paper certificate, it is now typical for a CD to just be made up of a book entry and something that appears on the consumer's regular bank statements. In other words, there is frequently no "certificate" per per. Customers can demand a paper record from the bank or print their own using the financial organization's online banking service if they desire a physical record that proves their CD purchase.

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when a firm has moved beyond a production or selling orientation and attempts to discover and satisfy its customers' needs and wants, the firm is blank . multiple choice question. profit oriented price oriented sales oriented market oriented

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When a firm has moved beyond a production or selling orientation and attempts to discover and satisfy its customers' needs and wants, the firm is market oriented.

What is market oriented?

An approach to company known as "market orientation" places a high priority on determining consumer requirements and desires and developing goods and services that address them.

The success of a business depends on ensuring that customers are aware of a product or service and how to get it. Coca-Cola, Kleenex, Apple, and Amazon are among corporations that might be regarded of as having a market orientation.

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what are the benefits of a majority shareholder​

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Answer:

A majority shareholder in a company has significant control and influence over the company's decisions and policies. Some potential benefits of being a majority shareholder include:

1. Control: Majority shareholders can exert significant control over the company's direction and decision-making, including selecting board members and executives, and approving major decisions.

2. Dividends: As a majority shareholder, you are entitled to a greater proportion of the company's profits and may receive higher dividends.

3. Increased Value: The value of the company and its stock can increase as a result of a strong performance, which would benefit the majority shareholder.

4. Greater Voting Power: Majority shareholders have greater voting power in corporate matters such as mergers and acquisitions, stock issuances, and other significant decisions.

5. Strategic Influence: Majority shareholders may be able to shape the company's strategy and long-term goals, potentially leading to higher returns.

It is important to note that being a majority shareholder also carries significant responsibilities and risks, such as potential legal liability and exposure to market volatility.

the market's required return is 10% and the risk-free rate is 5%. what is the portfolio's required return? do not round intermediate calculations. round your answer to three decimal places.

Answers

The needed return for the portfolio is 7.500%.

The required market return is 10%.

5% is the risk-free rate.

Expected Portfolio Return = (Asset 1 Weight x Expected Return) + (Asset 2 Weight x Expected Return).

= ( 300000 x 1.35 ) + ( 100000 x 1.6 )

= 7.500%

The expected returns of each security included in a portfolio are weighted averaged to determine the portfolio's expected return.

In order to be well-diversified, a portfolio must consider the predicted returns of a variety of assets.

Investors must determine the expected return of each holding in their portfolio as well as the overall weight of each holding in order to determine the expected return of the entire portfolio.

By dividing each asset's weight in the portfolio by its anticipated return, the basic expected return formula entails combining all those.

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example of a short-term capacity increase decision is: multiple choice adding specialized labor. installing new equipment. adding new facilities.

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An example of a short-term capacity increase decision could be:Adding specialized labor This involves hiring additional workers with specific skills

This option can be quick to implement and provides flexibility, as the number of specialized workers can be easily scaled up or down depending on demand.

Installing new equipment: This involves investing in new machinery or equipment to increase production capacity. This option can be more expensive and time-consuming compared to adding specialized labor, but it can provide a long-term solution if the equipment is expected to last for several years.

Adding new facilities: This involves building or acquiring new facilities to expand production capacity. This option is the most expensive and time-consuming of the three, as it involves a significant investment in real estate and construction. However, it can provide a long-term solution for capacity constraints.

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why does demand equal marginal revenue for perfectly competitive firms byt marginal revenue is than the demand curve for all imperfectly comepetive firms

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In a perfectly competitive market, firms are price takers and have no control over the market price. The market determines the price and firms must accept it.

Since the demand curve is perfectly elastic for a perfectly competitive firm, the marginal revenue is equal to the market price. This means that the firm can sell one more unit without changing the price, so the revenue from that unit is equal to the market price. On the other hand, in an imperfectly competitive market, firms have some degree of market power and are able to influence the market price. The demand curve for the firm's product is downward sloping, meaning that as the firm increases its output, the market price will decrease. In this case, the marginal revenue is less than the demand curve.

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what will happen to a firm found to be in violation if the company had proactively tried to prevent misconduct from occurring?

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When has the company taken proactive steps to prevent misconduct when it has identified a violation Penalties or fines are reduced. When creating an annual budget, few people think about how to prevent unethical behavior in the workplace.

When creating an annual budget, few people think about how to prevent unethical behavior in the workplace. According to a report to the Association of National Chartered Fraud Examiners (ACFE), a typical company could expect to lose 5% of his annual revenue to fraud. Corruption has always been the most pressing concern for large businesses, while small businesses face check manipulation, skimming and payroll fraud more frequently. Despite these differences in fraud techniques, the study found that the median loss of $120,000 reported varies little by company size. Just as employees are susceptible to gradual ethical erosion, they are equally open to positive influence. Research has shown that “nudges” in the right direction such as, for example, by signing a document confirming the legitimacy of a mileage fee just prior to actually submitting the mileage number, can unwittingly encourage employees to make more money.

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a increase in the marginal benefit arising from a specialized investment will cause the optimal contract length to:

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A increase in the marginal benefit arising from a specialized investment will cause the optimal contract length to become longer.

The longer contract length will allow the parties to reap the full benefits of the investment and ensure that the investment is not prematurely terminated. The increase in the marginal benefit from the investment highlights the value of the specialized knowledge and skills developed through the investment, and a longer contract length will provide the necessary time for the parties to realize these benefits.

Additionally, a longer contract length also reduces the risk of opportunistic behavior by the parties and helps to ensure that the investment is protected.

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you are a project manager and find out that one of the project's net present value (npv) is negative. what should you do? group of answer choices calculate the profitability index (pi) determine the present value of the project cost decrease the discount rate reject the project

Answers

Option 4 is correct. If the project's net present value (NPV) is negative, the project should be rejected.

Net present value (NPV) is the contrast between the current worth of money inflows and the current worth of money surges throughout some stretch of time. NPV is utilized in capital planning and speculation wanting to dissect the benefit of a projected venture or task.

NPV is the consequence of computations that find the ongoing worth of a future stream of installments, utilizing the legitimate markdown rate. As a general rule, projects with a positive NPV merit undertaking while those with a negative NPV are not.

In simpler words - NPV=Today’s value of the expected cash flows−Today’s value of invested cash

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Complete Question -
You are a project manager and find out that one of the project's net present value (npv) is negative. what should you do?

group of answer choices

1.  calculate the profitability index (pi)

2. determine the present value of the project

3. cost decrease the discount rate

4. reject the project

a property has a subdivision restriction forbidding the use of properties for commercial purposes. the zoning ordinance for the area would permit commercial use. can the property be used for a commercial purpose?

Answers

No. The subdivision restrictions takes precedence over the zoning ordinance since it is more restrictive.

A zoning ordinance is a standard that characterizes how property in unambiguous geographic zones can be utilized. Drafting laws detail whether explicit geographic zones are OK for private or business purposes. zoning ordinance may likewise direct parcel size, position, thickness, engineering style, and the level of designs. zoning ordinance additionally depict the strategies for how to deal with any drafting rule infractions (counting any punishments).

The fundamental kinds of zoning are modern, business, private, and rural. Different kinds of drafting utilized in certain districts incorporate notable, school, medical clinic, and air terminal drafting. Inside the primary classes, there are typically assignments for thickness of units. For instance, in certain areas, private drafting incorporates assignments like R-2 for up to two private units for each section of land or R-4 for up to four private units for every section of land. Assignments like R-2 and R-4 mean altogether different things relying upon the district, so check with your neighborhood drafting office to understand in yours.

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company x has 100 shares outstanding. it earns $1,000 per year and expects to pay all of it as dividends. if the firm expects to maintain this dividend forever, calculate the stock price immediately after the dividend payment. the required rate of return is 10%, and there are no taxes.

Answers

The stock price immediately after the dividend payment would be $90,909.09.

The price of a stock can be calculated using the dividend discount model, which states that the price of a stock is equal to the present value of all future dividends.

In this case, the firm earns $1,000 per year and plans to pay all of it as dividends, so the present value of one year's dividend is:

$1,000 / (1 + 0.1) = $909.09.

Since there are 100 shares outstanding, the stock price would be:

$909.09 × 100 = $90,909.09 per share.

The calculation assumes that the dividend is expected to be maintained forever, so the stock price is based on the perpetuity formula, which calculates the present value of an infinite stream of equal payments.

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suppose mr. rosevell wants to generate a five-year annuity cash flow of $1000/year. how much must be invested today? assume that the first payment will be one year from today and assume that the interest rate will keep constant at 12%.

Answers

The amount that must be invested today to generate a five-year annuity cash flow of $1000/year is $5,068.31. This is calculated using the present value of an annuity formula with a payment of $1,000, an interest rate of 12%, and a total of 5 periods.

The amount that must be invested today is $8,084. This is calculated by using the present value of an annuity formula, which is PV = PMT * ((1 - (1 / (1 + r)^n)) / r).

In this case, PMT = $1000, r = 12%, and n = 5. Plugging these into the formula gives us PV = $1000 * ((1 - (1 / (1 + 0.12)^5)) / 0.12) = $8,084.

So, Mr. Rosevell must invest $8,084 today in order to generate a five-year annuity cash flow of $1000/year. The first payment will be one year from today and the interest rate will stay constant at 12%.

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goal displacement, increased paperwork, lack of creativity, oligarchy and the peter principle are all byproducts of

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Goal displacement, increased paper work, lack of creativity, oligarchy and Peter principle are all the byproducts of Bureaucracy.

A bureaucracy is a complex organisation with multilayered systems and processes. The systems and processes that have been put in place effectively slow down decision-making. They are intended to keep the organization's uniformity and control.
According to the Peter Principle, if you do well at your job, you will most likely be promoted to the next level of your organization's hierarchy. You will continue to advance up the ladder until you are no longer capable of performing well.
Bureaucracies include all of the approximately 2,000 federal government agencies, divisions, departments, and commissions. The Social Security Administration, the Internal Revenue Service, and the Veterans Benefits Administration are among the most visible of these bureaucracies.

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select all that apply depreciation is the accountant's estimate of the cost of blank used in the production process matched with the benefits produced from owning it. multiple select question. fixed assets cash inventory equipment

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Depreciation is the accountant's estimate of the cost of blank used in the production process matched with the benefits produced from owning itfixed assets, equipment

Depreciation is an accounting term that refers to the systematic and rational allocation of the cost of a tangible fixed asset over its useful life. This cost allocation is done to match the expenses incurred in acquiring and using the asset with the revenue generated from its use.

Fixed assets and equipment are physical assets that are used in the production process and have a useful life of more than one year. Depreciation is the method used to allocate the cost of these assets over their useful life. By matching the cost of the asset with the benefits produced from owning it, the company can more accurately reflect the true cost of production and the cost of providing goods or services.

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Depreciation is the accountant's estimate of the cost of "fixed assets" and "Equipment" used in the production process matched with the benefits produced from owning it. Correct options are A and D.

Depreciation is an accounting term used to describe the systematic allocation of the cost of a fixed asset over its useful life. Fixed assets are long-term assets that a company uses in its operations and are expected to provide benefits for more than one year, such as equipment, buildings, and machinery.

The purpose of depreciation is to match the cost of the asset with the benefits produced from owning it. This means that, over the course of the asset's useful life, the cost of the asset is spread out over the periods in which the company benefits from its use.

For example, if a company buys a piece of equipment for $100,000 that is expected to last for 5 years, the company might depreciate the equipment over those 5 years. This would mean that each year, the company would record $20,000 in depreciation expense in its financial statements.

In conclusion, depreciation is an important accounting tool used to allocate the cost of a fixed asset over its useful life, which helps to match the cost of the asset with the benefits produced from owning it.

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Complete question is:

Select all that apply:

Depreciation is the accountant's estimate of the cost of blank used in the production process matched with the benefits produced from owning it. A. fixed assets

B. cash

C. inventory

D. equipment

what is a provision in a contract mandating that all disputes arising under the contract be settled by arbitration called?

Answers

A contract's binding arbitration clause, which stipulates that any disputes arising out of it must be resolved by arbitration, is the main mechanism for obtaining arbitration.

The parties include an arbitration of clause in the relevant contract for any potential future issues emerging under it. By agreeing to a contract that includes a mandatory binding arbitration clause, you consent to having any and specific disagreements about the terms of the agreement resolved by an arbitrator rather than a judge. You might also consent to give up additional rights, like the right to file an appeal or take part in a class action lawsuit.

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a company purchased a $100,000 building in exchange for a 20-year note payable. the company recorded a $100,000 increase in the building account and a $100,000 decrease in cash. as a result of this error, .(check all that apply.)

Answers

-The company's total assets will be overstated.

-The company's total liabilities will be understated.

-The company's net income will be overstated.

-The company's equity will be understated.

A. The note payable account should have increased by $100,000

B. The cash account should have increased by $100,000

C. The company's total assets were overstated by $100,000

D. The company's total liabilities were understated by $100,000

A, B, and D are correct. The note payable account should have increased by $100,000, the cash account should have increased by $100,000, and the company's total liabilities were understated by $100,000. The company's total assets were not overstated.

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which ratio measures a firm's ability to pay short-term obligations with its available cash and market securities?

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A company's capacity to meet its short-term financial obligations is gauged by its working capital ratio.

The working capital turnover ratio assesses how well a company uses its operational resources to support sales. Greater efficiency is indicated by a better ratio. On the other side, a high ratio could enhance business operations for your company and reduce the need for further investment. The working ratio gauges a company's ability to recover operating costs from annual revenue. The total annual fees, excluding depreciation and debt-related expenses, are determined by dividing the sum by the annual gross income. The working capital ratio, commonly referred to  the current ratio, provides a quick snapshot of an organization's financial situation. the current.

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what factor was primarily responsible for the excess in production capacity in the united states after world war ii?

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The conversion of the economy from a war-time to a peace-time economy.

After World War II, the primary factor responsible for the excess in production capacity in the United States was the conversion of the economy from a war-time to a peace-time economy.

During the war, the U.S. economy was highly focused on producing goods for the military, which led to a significant increase in production capacity. However, after the war, there was a sharp decrease in demand for war-related goods, leading to a significant excess in production capacity.

This excess production capacity was further exacerbated by the growth of consumer spending, which created a boom in the demand for consumer goods and put pressure on businesses to increase production even further.

The result was a significant amount of excess production capacity that was not fully utilized, leading to inefficiencies and waste.

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The specific data that Nielsen provides to its clients for a specific purpose that has not been completed before, is most likely which type of data? Descriptive Exploratory Causal Secondary Primary

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The correct option is E. The specific data that Nielsen provides to its clients for a specific purpose that has not been completed​ before, is most likely the primary type of data.

Refers to immediately measured or accumulated information consultant of activities at a particular facility or set of centers. Case-specific facts way nonaggregated data that provide facts approximately people within a group. A facts point or commentary is a hard and fast of one or greater measurements on an unmarried member of the unit of remark.

Records series is the process of amassing and studying records on relevant variables in a predetermined, methodical manner so that you will reply to unique study questions, check hypotheses, and investigate results. data analysis is described as a procedure of cleansing, reworking, and modeling statistics to discover beneficial facts for enterprise selection-making. The reason for information analysis is to extract beneficial information from information and taking a decision based on the information analysis.

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Complete Question:

The specific data that Nielsen provides to its clients for a specific purpose that has not been completed before, is most likely which type of data?

A). Descriptive

B). Exploratory

C). Causal

D). Secondary

E). Primary

which of the following stages has a positive cash flow? question 24 options: seed/start-up stage early stage expansion stage later stage

Answers

The answer is expansion stage, it is one of the stages to have positive cash flow.

Simply put, what is cash flow?

Cash flow is a metric used to determine how much money a company earned or spent overall during a given period of time. On the statement of cash flows, a common financial statement, cash flow is often segmented into cash flow from operating operations, cash flow from investing activities, and cash flow from financing activities.

Why is there a cash flow?

The goal of a cash flow statement is to paint a thorough picture of what happened to a company's cash over a given time period, also referred to as the accounting period. Based on how much money is coming into and going out of the company, it shows how well a company can operate both in the short and long term.

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how can you increase your business

Answers

To increase your business, its better to promote it on many social medias. For example, on TikTok, you can use viral sounds and tags to promote it. Make sure you have your website, supplies, email, and more when you start your business. You need to also have a business about something you enjoy. This will keep you motivated to continue what you do and will also help you get more customers.

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the following are possible methods of collection of data for a job analysis: group of answer choices position description all of the answers are correct checklist reviewing other positions

Answers

All of the answers are correct methods of collecting data for a job analysis.

Position description: A position description outlines the duties, responsibilities, and requirements of a specific job. It can be used as a reference to gather information about the tasks involved in a job and the skills and knowledge needed to perform them.

Group of answer choices: This method involves presenting a list of tasks or responsibilities associated with a job and asking employees to select the ones they perform or consider important. This can provide insight into the specific responsibilities and duties of a job.

Checklist: A checklist is a list of tasks or responsibilities that need to be performed in a job. It can be used to ensure that all relevant information is collected during the job analysis process.

Reviewing other positions: This method involves reviewing the job descriptions and responsibilities of similar positions in the same or other organizations. This can provide a benchmark for the job being analyzed and help identify any potential gaps or differences.

All these methods can provide valuable information for a job analysis, and the appropriate method(s) will depend on the specific needs and objectives of the analysis.

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the acquisition of knowledge, skills, and behaviors that improve an employee's ability to meet changes in job requirements and in client and customer demands is called

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The acquisition of knowledge, skills, and behaviors that improve an employee's ability to meet changes in job requirements and in client and customer demands is called development.

According to the Society for Human Resources Development  (SHRM), employee orientation (also known as organizational socialization) is "the process of helping new employees quickly and smoothly adjust to the social and performance aspects of a new job and learn attitudes, knowledge, and skills.

Organizational training is the transfer of  knowledge within an organization. This type of training focuses on developing employees for their current jobs, but also prepares them for future roles and responsibilities. Organizational training allows employees to develop new skills.

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If you put up $48,000 today in exchange for a 6. 25 percent, 15-year annuity, what will the annual cash flow be? (Do not round intermediate calculations and round your answer to 2 decimal places, e. G. , 32. 16. )

Answers

The cash flow will be $5023.26 per year. Reason: To determine the Annual Cash Flow, use the PV Annuity calculation.

The formula for calculating an annuity's present value is:

PV = Individual Annuity Payment Amount x P = PMT * [1 - [(1 / 1+r)n] / r] .

where P is the annuity stream's present value.

PMT stands for the sum of each payment.

r = Interest or discount rate.

Due to the current economic uncertainty, payments that are due in a few decades will be worth less. In contrast, because they can be invested in the interim, present payments are more valuable.

As a result, having $10,000 in your possession right now is more valuable than having $10,000 in ten years.

Early access to these funds can assist you in paying off debt, taking care of auto maintenance, or making a down payment on a house.

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Under the revenue recognition principle, revenues are recognized only:________

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According to the revenue recognition concept, a company's revenues are recognised when a service or product is deemed delivered to the customer.


The amount of money earned by routine business operations is known as revenue, which is calculated by dividing the average sales price by the number of units sold. When costs are subtracted, the top line (or gross income) amount is what is utilised to determine net income. In the income statement, sales are another word for revenue. Even though their approaches and resources differ, governments, nonprofit organisations, and private individuals are examples of non-commercial enterprises that also report revenue. Revenue merely denotes the revenues from sales, whereas income or profit takes into account the costs associated with earning revenue and reports net (as opposed to gross) results.

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what is the present value (as of today) of the expected cash flow produced by a building in 3 years if the building is worth $2300000, the cost of capital is 4.0%, and annual fixed cash flows are expected with the first one due in one year?(round the value to 0th decimal to get a whole number)

Answers

The present value of the expected cash flow from a building worth $2300000, with an annual fixed cash flow and the first one due in one year, is $2,116,537 when the cost of capital is 4.0%.

This value can be calculated by using the present value formula, which takes into account the time value of money and the cost of capital.

Calculate the annual fixed cash flow (CF): CF = $2300000 / 3 = $766667.Calculate the present value (PV): PV = CF / (1 + r)^n, where r is the cost of capital (4.0%) and n is the number of years (3).Plug in the values into the equation: PV = $766667 / (1 + 0.04)^3 = $2,116,537.Round the value to 0th decimal to get a whole number: $2,116,537.

The present value of the expected cash flow is $2,116,537.

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a preferred stock is expected to pay a constant quarterly dividend of $1.25 per quarter into the future. the required rate of return, rs, on the preferred stock is 13.5 percent. what is the fair value (or price) of this stock? multiple choice $37.04 $24.36 $52.36 $18.65 none of these choices are correct.

Answers

If the required rate of return, Rs, on the preferred stock is 13.5 percent, then the price of the share is $37.04.

What are preferred stocks?

Stock is a phrase used to describe equity or ownership in a company. Equity comes in two flavors: common stock and preferred shares. Compared to common stockholders, preferred stockholders have a stronger claim to dividends or asset distribution. Each preferred stock's specifics vary depending on the offering.

To determine the present intrinsic value of the stock, we divide the quarterly dividend by the quarterly rate:

13.5% = 13.5/100 = 0.135, which we now divide by 4,

0.135 / 4 = 0,03375 quarterly rate

1.25 / 0,03375 = 37,037037 = $37.04 value of the share based on their future cash dividends.

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