Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.

Echo Company issued a unit for $50. It combines 1 common share with 1 preferred share. At the time of issue the market price of the preferred shares traded at $30 per share and the common shares traded at $15. What is the cost base of the preferred and common shares? What is the cost base of the preferred and common shares from each unit? O a) $30 for the preferred share and $15 for the common. b) $45 for the preferred share and $45 for the common. c) $45 for the preferred share and $13.50 for the common. d) $33.33 for the preferred share and $16.67 for the common.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

See similar textbooks

Similar questions

Item No. 4 is based on the following information: nysg bns n Luningning Corporation sold for cash 400 preference shares with a par value of P 50 per share at P56 per share. Also, 600 ordinary shares with no par value but with stated value of P 100 per share were sold for P 102 per share. 4. What would be the effect of the transaction on the total Share Premium account? a. PO. C. P 2,400. b. P 1,200. d. P 3,600.
Given the image: If an investor purchased 150 shares of Sunoco stock at $83.43 and the brokers commision was 2.5%, what is the amount of the commision and the total cost of the purchase?
Vaughn Corporation sold 390 shares of treasury stock for $55 per share. The cost for the shares was $45. The entry to record the sale will include a O credit to Treasury Stock for $21450. O credit to Paid-in Capital from Treasury Stock for $3900. O debit to Paid-in Capital in Excess of Par for $3900. O credit to Gain on Sale of Treasury Stock for $17550.
An investor is deciding whether to purchase 5,000 ABC Inc. shares which has an EPS ratio of P75. He would like to compare ABC with the average price-earnings ratio of three of its closest competitors. The following are the details of the competitors. X Inc. Y Co. Z Corp. Market value per share 564.00 P 2,367.00 P 142.00 Divided by: Earnings per share 103.00 412.00 23.00 P-E Ratio 5.48 P 5.75 P 6.17 Average PE of competitors 5.80 The investor expects ABC's relative value to increase by 10% each year. If the investor would like to sell his investment in ABC by the end of 5 years but expects to incur a cost to sell of P500,000 due to low tradeability, how much should the investor pay for each share now?
A company has preferred stock that can be sold for $27per share. The preferred stock pays an annual dividend of $3.50based on a par value of $100. Flotation costs associated with the sale of preferred stock equal $1.10per share. Therefore, the cost of preferred stock is
Mayo Inc.'s perpetual preferred stock sells for $97.50 per share, and it pays an $8.50 annual dividend. What is the company's cost of preferred stock for use in calculating the WACC? Show work in excel and explain answer
XYZ, Inc. sells 100 shares of treasury shares at $10 per share. If the cost of acquiring the shares was $13 per share the entry for the sale should include credits to: Select one: a. Treasury Shares $1,000 and shares premium- treasury 300 b. Treasury Shares $1,300 c. Treasury Shares $1,000 d. Treasury Shares $300 and shares premium - treasury 1000
Virma Corporation sold to a subscriber 500 shares of its P30 par value common stock at P32 per share receiving a 30% down payment. In recording this transaction, A. Ordinary share will be credited in the amount of P15,000 B. Ordinary share will be credited in the amount of P16,000 C. Subscribed share capital will be credited in the amount of P15,000 D. Share premium will be credited in the amount of P4,500 Leon Corporation sold 500 shares of its P40 par value preferred stock for cash at P50 per share. In recording this transaction, there would be a A. Credit to preference share capital for P25,000 B. Credit to preference share capital for P20,000 C. Credit to subscribed preference share capital for P20,000 D. Credit to share capital in excess of stated value for P5,000 Luningning Corporation sold for cash 400 shares of preferred stock with a par value of P50 per share at P56 per share. Also, 600 shares of common stock with no…
A company’s preferred stock currently trades at $80 per share and pays a $6 annualdividend per share. Ignoring flotation costs, what is the firm’s cost of preferred stock?
Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company has preferred stock. The company's basic earnings per share is: Multiple Choice $44.00. $26.67 $1.59. $1.71. $1.65.
C&S Corp. issued 66 shares of its $1 par value common stock for $11 per share. Issue costs were $86 What amount would they record as Additional Paid-In Capital-Common Stock? Type your answer.....
Compute the Values of an equity share and of preference share of each of the following companies: (a) When a few shares are sold and (b) When controlling shares are to be sold. Following information is furnished: Company A Company B $ Profit after tax 10,00,000 10,00,000 12% Preference Capital (Shares of $ 100 each) 10,00,000 20,00,000 Equity Capital ( Shares of $ 10 each ) 50,00,000 40,00,000 Assume that market expectation is 15% and 80% of profits are distributed.