An equity investment in less than 20% of another companys outstanding stock is accounted for using the fair value method.Answer:TrueFalse
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- Calculate: -cost of common equity from retained earnings, using the CAPM method. - cost of new common stock based on the CAPMThe common stock received from the new company is recorded at ...... Select one: a. Average value b. Face value c. Market value d. Exist ValueIf a company has issued only one class of stock, the earnings per share are determined by dividing net income plus interest expense by the number of shares outstanding. Group of answer choices True False
- It is calculated, taking into account the outstanding equity shares of the company A. Conversion Earnings per share B. Diluted earnings per share C. Basic earnings per share D. Share optionsA company reports the following: Determine (a) the return on stockholders equity and (b) the return on common stockholders equity. Round percentages to one decimal place.What information do you need to calculate the weighted average common shares outstanding?
- What is par value? Select one: a. The price at which a company's stock is sold b. The dollar amount credited to capital stock when issued c. The lowest price at which a company's stock may be issued d. The highest price at which a company's stock may be issuedMatch each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resoldMatch each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold SELECTED FORMULAS PVIFA = PVIF = requity = rassets + (rassets – rdebt) PV of tax shield = = Tc *DWACC = (1-Tc) * *() + *()
- If stock is issued above par, what other equity account can be credited? Choices: common stock paid in capital cash retained eariningsSummary information from the financial statements of two companies competing in the same industry follows. Barco Company Data from the current year-end balance sheets Кyan Company Barco Company Data from the current year's income statement Кyan Company Assets Cash Accounts receivable, net Merchandise inventory $770,000 $880, 200 585,100 7,900 14,800 162,200 4.51 Sales $ 19,500 $ 34,000 46,500 84,440 5,000 290,000 632,500 Cost Interest expense Income tax expense Net income goods sold 13,000 24,300 64,600 132,500 6,950 304,400 210,400 Prepaid expenses Plant assets, net Basic earnings per share 5.11 Total assets $445,440 $542,450 Cash dividends per share 3.81 3.93 Liabilities and Equity Current liabilities Long-term notes payable Common stock, $5 par value Retained earnings $ 61,340 $ 93,300 101,000 206.000 Beginning-of-year balance sheet data Accounts receivable, net Merchandise inventory Total assets Common stock, $5 par value $ 29,800 $ 54,200 55,600 398,000 180,000 80,800 180,000…Which financial ratio does the DuPont equation help to explain? ROA (return on assets) ROE (return on equity) EPS (earnings per share) DPS (dividends per share)
