What is interest on interest, and why is it such an important element of return?
Answer to relevant QuestionsFrom a tax perspective, would it make any difference to an investor whether the return on a stock took the form of dividends or capital gains? Explain.What’s the difference between a secured bond and an unsecured bond?Briefly describe the two basic sources of return to investors.A company has total assets of $2.5 million, total liabilities of $1.8 million, and $200,000 worth of 8 percent preferred stock outstanding. What is the firm’s total book value? What would its book value per share be if the ...A 6 percent convertible bond (maturing in 20 years) is convertible into 25 shares of the company’s common stock. The bond has a par value of $1,000 and is currently trading at $800; the stock (which pays a dividend of 95 ...
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