1. An insurance company collected $3.6 million in premiums and disbursed $2.06 million in losses. Loss adjustment expenses amounted to 7.6 percent and dividends paid to policyholders totaled 1.2 percent. The total income generated from their investments was $270,000 after all expenses were paid. What is the net profitability in dollars?
2. Cisco Co. just sold new shares of preferred stock to the financial market. The price for each share is $65, with a flotation cost of $5 per share. The anticipated dividends from this preferred stock is $6 per share. What is the cost of preferred stock for Cisco Co.?
3. Is the finding out the intrinsic value of the company the same as finding out whether a company is overvalued or undervalued?