If the ownership of a closely held company is less than 50% of the outstanding stock, then the ownership is termed a: Question 20 options: a) minority interest. b) marketable asset. c) block asset. d) blockage discount. e) majority interest.
Q: rry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job…
A: CAPM, known as the Capital Asset Pricing Model, is a popular financial tool used to figure out how…
Q: Wild Swings, Inc.'s stock has a beta of 2.09. If the risk-free rate is 5.99% and the market risk…
A: The objective of this question is to calculate the cost of equity for Wild Swings, Inc. using the…
Q: a. What is the PV of adopting the system? (Do not round intermediate calculations and round your…
A: Net present value is determined by deducting the initial investment from the current value of cash…
Q: a)Upon entering college, you purchase the car of your dreams for $26000. You pay $5200 down and…
A: Car value = $26,000Down payment = $5,200Finance value = $20,800Loan tenure = 4 years or 48…
Q: Consider an investment where the cash flows are: – $946.21 at time t = 0 (negative since this is…
A: Internal rate of return:Internal Rate of Return (IRR) is a financial metric that calculates the…
Q: Consider the following information on a particular stock: Stock price = $88 Exercise price = $84…
A: Given Data:S = Current stock price K = Strike price (exercise price) r = Risk-free annual interest…
Q: oject our firm is contemplating the purchase of a new $580,000 computer-based order entry system.…
A: Internal rate of return refers to the return that is being earned by the investors over the amount…
Q: Given the following information concerning options on a particular stock: Stock…
A: The issue you presented has to do with option valuation, more especially with the Black-Scholes…
Q: Falcon Freight is evaluating a proposed capital budgeting project (project Delta) that will require…
A: IRR, or Internal Rate of Return, is a financial metric used to determine the profitability of an…
Q: all option on a stock with a strike price of $50.9 is $5.6. The stock price is $40.1, the…
A: Put options give an opportunity to sell the stock on the expiration of a period but there is no…
Q: For the following annuity due, determine the nominal annual rate of interest. Payment Term Period 3…
A: An annuity refers to a stream of periodic payments made in exchange for a lump sum payment. It is…
Q: The June Bug has a $270,000 bond issue outstanding that matures in 22 years. These bonds have a 7.6…
A: The objective of the question is to calculate the annual interest tax shield for the June Bug's bond…
Q: You have $69,000. You put 20% of your money in a stock with an expected return of 13%, $40,000 in a…
A: The objective of the question is to calculate the expected return of the portfolio. The expected…
Q: ABC Company is considering to establish a line of credit with a local bank to make up for the cash…
A: Line of credit refers to the type of loan which should be repaid after a certain time period after…
Q: A bond with a face value of $184000 and a quoted price of 101% has a selling price of O $186300. O…
A: In this question, we are required to determine the selling price of the bond.
Q: RiverRocks (whose WACC is 11.6%) is considering an acquisition of Raft Adventures (whose WACC is…
A: The objective of the question is to determine the appropriate discount rate for RiverRocks to use…
Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…
A: Payback period (PBP) refers to the period or duration within which the company is able to recover…
Q: a. 5.2% compounded monthly? years, month(s) b. 7.2% compounded monthly? month(s) years, c. 76%…
A: Using Excel's self explanatory function=NPER(r/12,-monthly payment, 0,future value)
Q: K A 50-kowall gas turbine has an investment cost of $36,000 it costs another $14,000 for shipping,…
A: Variables in the question:Investment=$36000Shipping,insurance and , site preparation and other…
Q: Date 1 Mo N/A N/A N/A 01/02/01 01/03/01 01/04/01 3 Mo 5.87 5.69 5.37 6 Mo 1 Yr 5.11 5.04 5.58 5.44…
A: An illustration of the interest rates or yields on financial instruments with varying maturities at…
Q: Internal rate of return method The internal rate of return method is used by Royston Construction…
A: IRR means Internal rate of return.It is the rate of return at which present value of cash inflows is…
Q: Caspian Sea Drinks is considering the production of a diet drink. The expansion of the plant and the…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: A company issued 8%, 10-year bonds with a face amount of $100 million. The market yield for bonds of…
A: Rate =4/2=2%Time =10∗2=201- Interest =$100,000,000∗6/12∗8%.=$4,000,0002- PV factor :Interest…
Q: A U.S. firm has total assets valued at €792,000 located in Germany. This valuation did not change…
A: Value of assets in Euro = 792000 EuroExchange rate : 0.9458 Euro per DollarValue of assets in…
Q: Computing Bond Issue Price and Preparing an Amortization Table in Excel On December 31, 2021,…
A: Par value of the bonds issued = $600,000Coupon rate = 9%Effective rate = 8%Period = 10 years
Q: a. Several years ago, Castles in the Sand Inc. issued bonds at face value of $1,000 at a yield to…
A: BondA bond represents debt investment or a loan. It is a financial instrument in which the borrower…
Q: Assume your U.S. firm currently has a profit center in Malaysia, receiving a significant number of…
A: If your U.S. firm has a profit center in Malaysia and receives a significant amount of Malaysian…
Q: Katie Pairy Fruits Incorporated has a $2,200 23-year bond outstanding with a nominal yield of 15…
A: Current price of the bonds and present value of the bonds both can be computed using the pv function…
Q: You are planning to produce a new action figure called "Nia." However, you are very uncertain about…
A: The abandonment value represents the potential benefit from the option to cease an investment or…
Q: Gabriel Summers purchased 380 shares of the Northern Lights Growth Fund. The purchase cost was $40…
A: The load charged by a fund is a fee or commission that an investor pays when buying or selling…
Q: A Treasury bond that matures in 5 years has a yield of 4.8%-A5-year corporate bond has a yield of…
A: The yield of 5-year Treasury Bond = 4.8%The yield of 5-year Corporate Bond = 6.55%Liquidity Premium…
Q: Lana Powell is seeking part-time employment while she teaches school. She is considering purchasing…
A: Present value refers to the current worth or value of a future sum of money or cash flow, at a…
Q: Sarensen Systems Inc. is expected to pay a dividend of $2.50 at year end (D), the dividend is…
A: WACC is the average cost of capital which can be calculated by multiplying the weight of securities…
Q: When a corporation originally issues sh ares to the investing public to raise capital, it is known…
A: Company raises money through shares and money is the form of ownership in the company and these are…
Q: What is the price of a three-year, default-free security with a face value of $1,000 and an annual…
A: 1.The price of a three-year, default-free security with a face value of $1,000 and an annual coupon…
Q: On May 3, 2020, Leven Corporation negotiated a short-term loan of $660,000. The loan is due October…
A: The amount that would be paid at some future date will be referred as the future worth of the amount…
Q: Which of these might happen? Group of answer hoices Jane's house cannot be left to the children…
A: Jane's house cannot be left to the children because of the mortgage: This is not entirely correct.…
Q: project requires an initial investment in equipment of $99,000 and then requires an initial…
A: NPV of project is most used method of capital budgeting based on time value and can be found as the…
Q: Lola Ruiz has a bond that has 10 years to maturity, a face value of $1,000, an 7 percent interest…
A: A bond is a financial instrument that represents a debt owed by the issuer to the bondholder. It is…
Q: Jerry Allen graduated from the University of Arizona with a degree in Finance in 2011 and took a job…
A: CAPM, known as the Capital Asset Pricing Model, is a popular financial tool used to figure out how…
Q: Assume you are risk-averse and have the following three choices Standard Deviation $1,440 1,960…
A: Coefficient of variation computed as follows:-Coefficient of variation =
Q: The following table shows annual rates for various types of loans in 2021. Assume monthly payments…
A: A mortgage is a financial arrangement or loan that is typically used to purchase real estate, such…
Q: The incremental cash flows of leasing consider which of the following?I. cost of the assetII. lease…
A: The objective of this question is to identify the factors that are considered when calculating the…
Q: Problem 11-13 Economic Rents The following table shows the expected cash flows from a project. There…
A: cost of capital is 7%
Q: Given: So = INR 83/US$ F90 days INR 83.2834/US$ 90-day India = 6.91% 90-day lus = 5.34% O a. there…
A: Let's break this down. Interest rate parity refers to the equilibrium condition where the difference…
Q: Laurel, Inc., has debt outstanding with a coupon rate of 5.8% and a yield to maturity of 7.1%. Its…
A: The objective of the question is to calculate the effective after-tax cost of debt for Laurel, Inc.…
Q: onsider the following information on a particular stock: Stock price = $88 Exercise price = $84…
A: Call option gives opportunity to buy stock on expiration but there is no obligation to do that any…
Q: Consider three mutually exclusive projects: Project A, Project B and Project C. The IRR of these…
A: Mutually exclusive projects are options where choosing one excludes the possibility of selecting the…
Q: Pfd Company has debt with a yield to maturity of 7.4%, a cost of equity of 14.2%, and a cost of…
A: The objective of the question is to calculate the after-tax Weighted Average Cost of Capital (WACC)…
Q: Your firm has identified three potential investment projects. The projects and their cash flows are…
A: NPV= Cash flow in Year 1 / (1+Interest rate) + Cash flow in year 0
Question 20 options:
|
|
||
|
|
||
|
|
||
|
|
||
|
|
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- Which of the following stock investments should be accounted for using the fair value method? a.investments between 20% and 50% ownership b.investments of less than 20% ownership c.investments of over 50% ownership d.all investments of less 50% ownershipBased on the presumption in IAS 27, the cost method is applied for equity securities when the percentage of ownership of another company is: Select one: A. 20% to 50%. B. Exactly 100%. C. Less than 20%. D. Over 50%.9. Multiple Choices The corporation has the option to repurchase the preferred stock at a specified price. a. redeemable b. cumulative c. convertible d. compound e. callable f. treasury
- 1. When share options granted vest base on a service condition a. Total fair value of the share options granted > Total compensation expense recognized over the vesting period b. Share options outstanding balance at the end of first year is not equal to Compensation Expense for first year c. Total fair value of the share options granted = Total compensation expense recognized over the vesting period d. Share options outstanding balance at the end of second year is equal to Compensation Expense for second year 2. When share appreciation rights are granted to employees a. expense, liability and equity accounts are recognize b. expense and equity accounts are recognize c. expense and liability accounts are recognize d. liability and equity account are recognized 3. Provided the specified vesting conditions, if any, are met, share-base payment arrangement is an arrangement between an entity and another party that entitles the other party to receive a. Cash or…Which of the following statement about a rights issue is correct? a. The share price can be expected to increase on the ex-rights date b. On the ex-rights date the rights separate from the share c. The subscription price is usually greater than the market price d. A rights issue is offered to an investor whether they are an existing shareholder or not e. If you buy shares cum-rights you are not entitled to participate in the rights issue1. Under IFRS 2 Share-Based Payment, what is the basis for measurement of share options? A. Fair value at the date of grant. B. Fair value at each reporting date. C. Expected fair value at the date pf exercise. D. Intrinsic value at each reporting date. 2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability. 3. When should the compensation expense be recorded as a result of share options granted by the enterprise to its employees?A. During the year of grant B. During the year that the options ultimately vest C. During the years when services are required to be rendered by the employees D. During the year when the option first becomes exercisable
- If shares are issued for a non-cash asset, the share should be recorded at? a. Zero b. Fair market value c. Par or stated value d. CostWhich of the following statements is true in relation to the call price of preference shares? The call price is used in computing book value per share. In the absence of call price, the liquidation value is disregarded and the par or stated value is instead used. The call price is the amount paid to preference shareholders upon redemption of preference shares during the lifetime of the entity. All of these statements are true.13. Options and warrants are dilutive if a. The exercise price is lower than the average market price b. The exercise price is higher than the average market price c. The exercise price is equal to the average market price d. The option shares represent 20% of the ordinary shares actually outstanding 14. For employee share options, the exercise price shall include a. Fair value of the share options b. Intrinsic value of the share options c. Carrying amount of the share options d. Par value of the share options 15. It is a reduction in earnings per share or an increase in loss per share resulting from the assumption that convertible instruments are converted, that options or warrants are exercised, or that ordinary shares are issued upon the satisfaction of specified conditions. a. Dilution b. Antidilution c. Either dilution or antidilution d. Neither dilution nor antidilution
- 1. The cost method of accounting for stock investments is used when the company acquires a. Greater than 50% of the company's stock b. Between 20% to 50% of the company's stock c. Less than 20% of the company's stock 2. The significance of percentage of ownership relates to how much _____________ the acquiring company has in the new company. a. data b. control c. confidenceUpon exercising share options, the resulting increase in the additional paid-in capital would be equal to a. The difference between the fair value of the shares and the par value of the shares, plus the fair value of the share options b. The difference between the exercise price and the par value of the shares c. The difference between the fair value of the shares and the par value of the shares d. The difference between the exercise price and the par value of the shares, plus the fair value of the share options22. Acovered call position is: a. the simultaneous purchase of the call and the underlying asset. b. the purchase of a share of stock with a simultaneous sale of a put on that stock. c. the short sale of a share of stock with a simultaneous sale of a call on that stock. d. the purchase of a share of stock with a simultaneous sale of a call on that sstock. e. the simultaneous purchase of a call and sale of a put on the same stock.