Homework Help: investing 3-4

Posted by Johnny on Sunday, February 22, 2009 at 12:04am.

4. Which of the following is the best conclusion, given only the following information:
ZYX Corporation’s earnings after taxes have declined by 3.13% from the year earlier.
During the past three months, ZYX purchased from investors (retired) 7.5% of the
corporation’s outstanding preferred stock shares, which pay dividends at 5% of par.

A. ZYX Corporation’s net income decline is largely attributable to the expense it
incurred to purchase its preferred stock.

B. ZYX Corporation’s preferred stock purchase should enhance earnings after taxes next
year because it will earn 5% dividend income from its new preferred stock holdings.

C. ZYX Corporation’s purchase of preferred stock had no effect on the firm’s asset balance.

D. ZYX Corporation’s purchase of preferred stock improved its capacity to pay preferred
stock dividends.

I need help with this one.

investing 3-4 - bobpursley, Sunday, February 22, 2009 at 7:35am
Are you grazing for answers?
investing 3-4 - Johnny, Sunday, February 22, 2009 at 8:53am
I don't understand this question. I have read the book and hoping somebody can explain to me.
investing 3-4 - SraJMcGin, Sunday, February 22, 2009 at 9:43am
For the rest of your questions, here is an Investing Tutorial search:

http://www.google.com/search?q=investing+tutorial&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

Sra
investing 3-4 - SraJMcGin, Sunday, February 22, 2009 at 9:43am
P.S. For future reference, no way can we explain what you have read. We do not have access to your text.

Sra

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