Answer:
The number of shares of stock CSD must sell is approximately 4,791,929.
Explanation:
To determine the number of shares of stock CSD must sell, we first calculate the current price per share using the Gordon growth model (GGM) formula as follows:
P = d1 / (r - g) ……………………………………… (1)
Where;
P = current price per share = ?
d1 = next year dividend = $1.21
r = required return or cost of equity = 12.14%, or 0.1214
g = dividend constant growth rate forever = 4.51%, or 0.0451
Substituting the values into equation (1), we have:
P = $1.21 / (0.1214 - 0.0451) = $1.21 / 0.0763 = $15.8584534731324
Approximating to 2 decimal places, we have:
P = $15.86
Amount needed to raise = $76.00 million, or $76,000,000
Therefore, the number shares that must be sold can be calculated as follows:
Number of shares that must be sold = Amount needed to raise / Current price per share = $76,000,000 / $15.86 = 4,791,929.38209332
Approximating to a whole number, we have:
Number of shares that must be issued = 4,791,929
Therefore, the number of shares of stock CSD must sell is approximately 4,791,929.
Under the Clayton Act, a divestiture order is: a. a decision by a court requiring a defendant to sell an enterprise. b. an order by a court requiring an enterprise to dispose of its inventory. c. notification from the Department of Justice that a merger did not occur. d. notification from the Department of Justice that a merger is about to occur.
Answer:
a. a decision by a court requiring a defendant to sell an enterprise.
Explanation:
The Clayton Act was enacted in 1914 and was passed in order to complement the Sherman Antitrust Act of 1890. It focused on preventing monopolistic actions when they were just starting.
A divestiture means that a company is forced to sell the stock it owns from a third party corporation, e.g. if Apple bought a significant amount of Samsung's stocks, and they were forced to sell them.
Red and White Company reported the following monthly data: Units produced 3,300 units Sales price $ 38 per unit Direct materials $ 5 per unit Direct labor $ 6 per unit Variable overhead $ 7 per unit Fixed overhead $ 8,910 in total What is Red and White's net income under variable costing if 1,110 units are sold and operating expenses are $15,000
Answer:
Net operating income= -$1,710
Explanation:
First, we need to calculate the unitary variable cost:
Unitary variable cost= 5 + 6 + 7= $18
Variable costing income statement:
Sales= 1,110*38= 42,180
Total variable cost= 1,110*18= (19,980)
Total contribution margin= 22,200
Total fixed overhead cost= (8,910)
Operating expenses= (15,000)
Net operating income= -$1,710
Suppose we have the yield and maturity information on treasury securities from a current yield curve. A 1-year T-bond currently yields 4.50% and a 3-year T-bond yields 9.80%. Assuming the pure expectations theory is correct, what is the market's forecast for interest rates on a 2-year treasury security, 1 year from now
Answer:
12.55%
Explanation:
The computation is shown below:
(1 + 3 Year Yield)^3 = (1 + 1 Year Yield) × (1 + 2 Year Yield 1 year from now)^2
(1 + 9.80%)^3 = (1 + 4.50%) × (1 + 2 Year Yield 1 year from now)^2
1.323753 = 1.0450 × (1 + 2 Year Yield 1 year from now)^2
1.266749 = (1 + 2 Year Yield 1 year from now)^2
1.1225 = 1 + 2 Year Yield 1 year from now
So,
2 Year Yield 1 year from now = 0.1255
= 12.55%
The sale of common stock below par
A. is not permitted in most states.
B. is a common occurrence in most states.
C. requires that a liability be recorded for the difference between the sales price and the par value of the shares.
D. is a practice that most stockholders encourage.
Answer:
Option A: it is not permitted in most states
Explanation:
Common Stock is simply a security or the form of security that shows an equity claim, voting rights, and claim on residual income of the firm. It shows or states the ownership in a corporation. Usually if and when you want to get (buying) common stocks, you are buying the corporation's factories, buildings, and products.
Par value stock is known as acapital stock that has been put in place(assigned) value per share in the corporate charter. The issuance of common stock affects the paid-in capital
What types of people make up a persons personal network
avi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. At a price of $15 a painting, what is the unit contribution ($) per painting sold?
Answer:
Unitary contribution margin= $7
Explanation:
Giving the following information:
Selling price per unit= $15
Unitary variable cost= $8
To calculate the unitary contribution margin, we need to use the following formula:
Unitary contribution margin= selling price - unitary variable cost
Unitary contribution margin= 15 - 8
Unitary contribution margin= $7
Rodney invests $2,400 today, compounded monthly, with an annual interest rate of 6.25%. What is Rodney's investment worth in one year
Answer:
FV= $2,554.12
Explanation:
Giving the following information:
Rodney invests $2,400 today, compounded monthly, with an annual interest rate of 6.25%.
First, we need to calculate the monthly interest rate:
i= 0.0625/12= 0.0052
Now, using the following formula, we can determine the future value:
FV= PV*(1+i)^n
FV= 2,400*(1.0052^12)
FV= $2,554.12
On October 5, 2011, you purchase a $10,000 T-note that matures on August 15, 2025 (settlement occurs two days after purchase, so you receive actual ownership of the bond on October 7, 2011). The coupon rate on the T-note is 6.25 percent paid semi-annually and the current price quoted on the bond is 102.53125. The last coupon payment occurred on May 15, 2011 (145 days before settlement), and the next coupon payment will be paid on November 15, 2011 (39 days from settlement).What is the dirty price of this bond
Answer:
$10,499.39
Explanation:
the dirty price of the bond = bond's clean price (market quote) + accrued interests
accrued interest = $10,000 x (6.25% / 2) x (145 days / 184 days) = $246.26bond's clean price = $10,000 x 102.53125% = $10,253.13bond's dirty price = $246.26 + $10,253.13 = $10,499.39
A company has already incurred $5,000 of costs in producing 6,000 units of Product XY. Product XY can be sold as is for $15 per unit. Instead, the company could incur further processing costs of $8 per unit and sell the resulting product for $21 per unit. Should the company sell Product XY as is or process it further? (Any loss amount should be indicated with minus sign.)
Answer:
Company like to sell product XY but not process it further.
Explanation:
Given:
Original cost = $5,000
No. of units = 6,000
Sales price per unit = $15
Processed cost = $8 per unit
New sales price = $21 per unit
Computation:
Old net profit = (6,000)(15) - 5000
Old net profit = $85,000
New net profit = (6,000)(21-8)
New net profit = $78,000
Profit from process is less than profit from sell
Company like to sell product XY but not process it further.
Foster Company makes and sells power tools. The budgeted sales are $420,000, the budgeted variable costs are $147,000, and the budgeted fixed costs are $227,500. What is the break-even point in sales dollars
Answer:
0.65
Explanation:
Breakeven sales = 227,500 / 0.65 = $350,000
147,000 / 420,000 = 0.35
1 - 0.35 = 0.65
1. January 1 Issue 10,000 shares of common stock in exchange for $42,000 in cash. 2. January 5 Purchase land for $24,000. A note payable is signed for the full amount. 3. January 9 Purchase storage container equipment for $9,000 cash. 4. January 12 Hire three employees for $3,000 per month. 5. January 18 Receive cash of $13,000 in rental fees for the current month. 6. January 23 Purchase office supplies for $3,000 on account. 7. January 31 Pay employees $9,000 for the first month's salaries. 3. Prepare a trial balance.
Answer:
Trial Balance as at January 31
Debit Credit
Cash $37,000
Common Stock $42,000
Land $24,000
Note Payable $24,000
Equipment $9,000
Salaries Expense $9,000
Rental Fees $13,000
Office Supplies $3,000
Accounts Payables $3,000
Explanation:
To prepare a Trial Balance, you first need to record the transactions in the Journal entries. After that you post the journals to appropriate ledger accounts. From the ledger accounts extract ending balances which you will post to the Trial Balance.
Record of the transactions will be as :
January 1
Cash $42,000 (debit)
Common Stock $42,000 (credit)
January 5
Land $24,000 (debit)
Note Payable $24,000 (credit)
January 9
Equipment $9,000 (debit)
Cash $9,000 (credit)
January 12
Salaries Expense $9,000 (debit)
Salaries Payable $9,000 (credit)
January 18
Cash $13,000 (debit)
Rental Fees $13,000 (credit)
January 23
Office Supplies $3,000 (debit)
Accounts Payables $3,000 (credit)
January 31
Salaries Payable $9,000 (debit)
Cash $9,000 credit)
Posting to Ledger Accounts and extraction of ending balances - summary
Cash $42,000 - $9,000 + $13,000 - $9,000 = $37,000
Common Stock $42,000
Land $24,000
Note Payable $24,000
Equipment $9,000
Salaries Expense $9,000
Salaries Payable $9,000 - $9,000 = $0
Rental Fees $13,000
Office Supplies $3,000
Accounts Payables $3,000
Kayla is considering investing in a bond with a face value of $12,000 with a coupon rate of 12% payable on a monthly basis. If she can get a 2.5% return per quarter on her money, what are the monthly payments that she can receive from the bond
Answer:
The answer is "$ 120"
Explanation:
Given value:
[tex]\text{Monthly payment= Face value} \times \frac{\text{Coupon rate}}{12}[/tex]
[tex]= \$ 12,000 \times \frac{12 \%}{12}\\\\= \$ 12,000 \times \frac{0.12}{12}\\\\= \$ 1,000 \times 0.12\\\\= \$ 120[/tex]
A company's board of directors' votes to declare a total cash dividend of $15,000. The company has 2,500 shares of $1 par common stock and 400 shares of 5%, $200 par preferred stock outstanding. What is the total amount that will be paid to preferred shareholders
Answer:
$4,000
Explanation:
The computation of the total amount that will be paid to preferred shareholders is shown below:
= Number of preference shares × dividend rate × par value
= 400 shares × 5% × $200
= $4,000
We simply applied the above formula so that the total amount of dividend paid to preference shareholders could come
And the same is to be considered
a company has beginning inventory of 11 units at a cost of 29 each on february 1 on february 3 it purchases 39 units at 31 each 17 units are sold on february 5 using the fifo periodic inventory method what is the cost of the 17 units that are sold
Answer:
COGS= $505
Explanation:
Giving the following information:
Beginning inventory of 11 units for 29 each
February 3 purchases 39 units at 31 each
17 sold
Under the FIFO (first-in, first-out) method, to calculate the cost of goods sold, we need to use the cost of the firsts units incorporated into inventory.
COGS= 11*29 + 6*31
COGS= $505
The portion of women in the workforce has nearly doubled since 1950. As a result, fewer mothers are providing services inside the home. How has this trend affected GDP
Answer:
Current GDP (both total & contributed by women) has increased. However GDP in 1950 was under estimated.
Explanation:
GDP is the total value of goods & services produced by an economy, during a given period of time. It doesn't include value of qualitative family care services, done by women.
So GDP in 1950, not including value of women's family care work would have been an under estimation of total GDP & women's contribution to GDP also.
After 1950, when women shift from house work not accounted in GDP to outside work accounted in GDP, GDP & women's contribution to GDP both rise.
The one-year LIBOR rate is 3% and the forward rate for the one- to two-year period is 3.2%. The three-year swap rate for a swap with annual payments is 3.2%. What is the LIBOR forward rate for the 2 to 3 year period if OIS zero rates for one, two, and three year maturities are 2.5%, 2.7%, and 2.9%, respectively
Answer:
$2.27 million
Explanation:
Calculation for What is the value of a three-year swap where 4% is received and LIBOR is paid on a principal of $100 million
First step is to calculate the value of the first
exchange
Value of the first exchange=0.032-0.030/1.025
Value of the first exchange=0.002/1.025
Value of the first exchange=0.001951
Second step is to calculate the value of the second exchange
Value of the second exchange=0.032-0.032/1.027^2
Value of the Second exchange=0.00
Third step is to calculate the value of the third exchange
Value of the third exchange=0.032-R/1.029^3
0.032-R/1.029^3=-0.001951
Hence R=0.0034126
In a situation where a swap of 4% is been received on a principal amount of $100 million
it will either provides 0.8% of $100 million or
the amount of $800,000 per year more than a swap that is worth zero which means that Its value be calculated as :
Value of the swap =800,000/1.025+800,000/1.027^2+800,000/1.029^3
Value of the swap =780,487.80+758,488.67+734,249.84
Value of the swap =$2,273,226.32
Value of the swap=$2.27 million
Therefore the valueof a three-year swap where 4% is received and LIBOR is paid on a principal of $100 million will be $2.27 million
A bond with a face value of $10,000 pays interest of 4% per year. This bond will be redeemed at its face value at the end of 10 years. How much should be paid now for this bond when the first interest payment is payable one year from now and a 5% yield is desired? (
Answer:
$9,228.8
Explanation:
The computation is shown below:
Given that
Bond face value = $10,000
Period = 10 years
Coupon rate or interest rate = 4%
Market rate or yield to maturity = 5%
Based on the above information
The Present value of bond is
= Present value of ordinary annuity + Present value of face value of the bond
Also the interest paid is
= 4% of bond face value
= $400
And, the factor of ordinary maturity table at 5% it is 7.722
So,
Present value of Annuity is
= $400 × 7.722
= $3,088.8
And,
Present value of face value of the bond is
= Face value × PV factor
= $10,000 × 0.614 = $6140
So, the present value of bond is
= $3,088.8 + $6,140
= $9,228.8
If a firm is unlevered and has a cost of equity capital 9%, what would the cost of equity be if the firms became levered at a debt-equity ratio of 1.8? The expected cost of debt is 7%. (Assume no taxes
Answer:
12.6
Explanation:
The cost of equity capital is 9%
Debt equity ratio is 1.8
The expected cost of debt is 7%
Therefore the cost of equity can be calculated as follows
= 9 + 1.8(9-7)
=9 + 1.8(2)
=9 + 3.6
= 12.6
Hence the cost of equity is 12.6
A bank makes a 30 year Fully Amortizing FRM for $800,000 at an annual interest rate of 4% compounded monthly, with monthly payments. What is the absolute difference between the balance and the market value of the loan after 36 monthly payments if the interest rate rises to 5%
Answer:
$77,649.16
Explanation:
Loan taken = $800,000
Duration of loan = 30 yrs
Interest rate = 4%
Monthly payment = PMT(RATE, NPER, PV, FV)
Rate(Monthly interest rate) = 0.33%
Nper= 360
PV=-800,000
FV = 0
Monthly payment = PMT(0.3, 03%, 360, -800,000)
Monthly payment = $3,819.32
Calculation of loan in 36 years
Monthly payment = 3,819.32
Rate = 0.33%
Years spent - 3
Yrs remaining = 27 yrs
No of month remaining = 324
Loan balance after 36 payment = Month payment (P/A, I, N)
Loan balance after 36 payment = 3,819.32 * Pv(0.33%, 324, -1,0)
Loan balance after 36 payment = $755,989.80
Market value of loan after 36 payment
Market value of loan after 36 payment = Monthly payment*(P/A, I,N)
= $3,819.32 * (P/A, 5%/12, 324)
= $678,340.64
Hence, Market value of loan after 36 payment is $678,340.64
Difference between loan balance and market value of loan = Loan balance after 36 payment - Market value of loan = $755,989.80 - $678,340.64 = $77,649.16
If bonds are initially sold at a discount and the straight-line method of amortization is used, interest expense in the earlier years will:________
a. exceed what it would have been had the effective-interest method of amortization been used.
b. be less than what it would have been had the effective-interest method of amortization been used.
c. be the same as it would have been had the effective-interest method of amortization been used.
d. be less than the stated (nominal) rate of interest.
Answer: a. exceed what it would have been had the effective-interest method of amortization been used.
Explanation:
If the effective - interest method of amortization is used, the interest expense in earlier years will be lower because the amortised amount used in the calculation of bond interest will be lower.
In contrast, straight-line apportions the amortised amount evenly across all the years so in earlier years the interest will be higher than using the effective-interest method.
Denton Company showed the following balances at the end of its first year:
Cash $ 7,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Denton, Capital 1,400
Denton, Drawing 700
Revenues 21,000
Expenses 17,500
What did Denton Company show as total credits on its trial balance?
a. $30,100
b. $29,400
c. $28,700
d. $30,800
Answer:
b. $29,400
Explanation:
The total credit balance in the trial balance is the sum of all credit accounts in the trial balance which are listed as follows:
Accounts payable( it is credited since it is a liability)
Notes payable( it is credited since it is a liability)
Denton, Capital(capital account has a credit balance)
Revenues( revenue also has a credit balance)
Denton Company total credits on its trial balance=2,800+4,200+1,400+21,000
Denton Company total credits on its trial balance=$29,400
Exercise 6-15A Calculate cost of goods sold, the inventory turnover ratio, and average days in inventory (LO6-2, 6-7) Skip to question [The following information applies to the questions displayed below.] Lewis Incorporated and Clark Enterprises report the following amounts for the year. Lewis Clark Inventory (beginning)$30,000 $56,000 Inventory (ending) 24,000 66,000 Purchases 355,200 185,800 Purchase returns 21,000 66,000
Answer:
Please see explanation below
Explanation:
Lewis incorporated
Beginning inventory
$30,000
Add: purchases
$355,200
Less: purchases return
($21,000)
Net purchases
$334,200
Less: ending inventory
($24,000)
Cost of goods sold
$340,200
Clark enterprises
Beginning inventory
$56,000
Add: purchases
$185,800
Less purchases return
($66,000)
Net purchases
$119,800
Less: ending inventory
($66,000)
Cost of goods sold
$109,800
1. Lewis incorporated
•Cost of goods sold = $340,200
• The inventory turnover ratio = Cost of goods sold / average inventory
Cost of goods sold = $340,200
Average inventory = ($30,000 + $24,000) / 2 = $27,000
Inventory turnover ratio = $340,200 / $27,000
= 12.6 times
• Average days in inventory = (Cost of average inventory / cost of goods sold ) × 365
= ($27,000 / $340,200) × 365
= 29 days
1. Clark enterprises
•Cost of goods sold = $109,800
• The inventory turnover ratio = Cost of goods sold / average inventory
Cost of goods sold = $109,800
Average inventory = ($56,000 + $66,000)/2 = $61,000
Inventory turnover ratio = $109,800 / $61,000
= 1.8 times
• Average days in inventory = (Cost of average inventory / Cost of goods sold) × 100
= ($61,000 / $109,800) × 365
= 203 days
Darla offers to pay Edward $6,000 for Edward's car, provided that Darla receives that much from her uncle's estate, which is currently being probated. She expects to know for sure how much she will receive within a week or so. In this case:
Answer:
Darla's consideration ($6,000) is subject to a condition. If this condition doesn't occur first, then the offer is terminated and no contract exists. A conditional offer is only binding after the condition actually occurs, e.g. if Darla receives $6,000 or more from her uncle's estate, then she has a binding contract with Edward.
g the company expects to earn at least 18% per year on invested capital. Based on the projected cash flow, what is the ERR
Answer:
27%
Explanation:
Economic Rate of Return : {[ Current Value - Cost ] / Cost } * 100
The Cash inflows for the project are $1,275,352 for the 3 years based on discounting rate of 18%.
The initial investment is $1,000,000.
ERR : {[$1,275,352 - $1,000,000 ] / $1,000,000 ] *100
ERR : 27% approximately
Calculate the weekly profit for a company with a total cost of $10,000 and a total revenue of $30,000.
Answer: $20,000
Explanation:
To calculate the profit made by a company or a particular business, we deduct the expenses or coat from the revenue generated.
In this case, the revenue is $30,000 while the cost is given as $10,000. Therefore, the profit will be:
= $30,000 - $10,000
= $20,000
The journal entry to record the requisition of direct materials for new jobs started during the period is
Answer:
Work in Process Inventory XXXX
To Materials inventory XXXX
(Being the requisition of direct materials for new jobs started is recorded)
Explanation:
The journal entry is shown below:
Work in Process Inventory XXXX
To Materials inventory XXXX
(Being the requisition of direct materials for new jobs started is recorded)
Here we debited the Work in Process Inventory as it increased the asset and at the same time we credited the material inventory as it decreased the asset so there is no impact on the accounting entry
I sell bottled water that costs me $1 to produce. I mark each bottle up by $2. What is my markup on cost
Answer:
1
Explanation:
If an economy is in a recessionary gap, then it
Answer:
i got choo
Explanation:
If the economy is in a recessionary gap, wages fall and the economy soon moves itself toward producing Natural Real GDP (at a lower price level than in the recessionary gap). ... wages rise and the economy soon moves itself toward producing Natural Real GDP (at higher price level than in the inflationary gap).
Question 16 of 20
The supply of a good available in a market is likely to decrease when:
A companies believe that the product's selling price will go up.
B. new regulations increase the cost of making the product.
оооо
C. the number of workers able to make the product increases.
D. new technology makes producing the product cheaper.
SUBMIT
When there is a decrease in the supply of a good, the cause is that B. new regulations ...
A decrease in supply does not occur when:
Companies are sure of increased prices.There is an increase in the number of workers.The product becomes cheaper as a result of new technology.Thus, a decrease in supply occurs when B. new regulations ...
Learn more about the factors that influence the supply of goods in the market here: https://brainly.com/question/11347508
At December 31​ year-end, Corporation has note receivable from a customer. Interest of ​% has accrued for months on the note. What will income statement for the year ended December 31 report for this​ situation?
Answer: C. interest revenue of $560
Explanation:
Accounting uses the accrual basis for calculation. This means that even though cash has not been received, revenue must still be recognized in the period it was acquired.
The revenue here is;
= 12,000 * 7% * 8/12 months
= $560
This revenue will therefore be recognized in the income statement as interest revenue.