This is a FOUR-PART question: 1. DEFINE debt ratio (for 2 po…

This is a FOUR-PART question: 1. DEFINE debt ratio (for 2 points) 2. STATE the equation to calculate the debt ratio (for 2 points) 3. EXPLAIN briefly what the bad debt ratio is used for (for 2 points) 4. STATE the equation to calculate the bad debt ratio (for 2 points)

Kansas City Southern Preferred 20% (NYSE: KSU-P), issued 2 J…

Kansas City Southern Preferred 20% (NYSE: KSU-P), issued 2 January 1996, has a par value of $25 per share. Thus, a share pays 0.20($25) = $5.00 in annual dividends. The required rate of return on this security is estimated at 5%. Estimate the value of this issue.