Q: Two stocks, A and B, have beta coefficients of 1.0 and 0.4, respectively. If the expected return on…
A:
Q: The risk-free rate of return is 2 percent, and the expected return on the market is 6.1 percent.…
A: Value of stock can be determined based on the dividend and growth of dividend and required rate of…
Q: You are considering the purchase of a condominium to use as a rental property. You estimate that you…
A: Mortgage A mortgage is an agreement between the lender and the borrower in which the lender lent…
Q: Calculate the accrued interest (in $) and the total purchase price (in $) of the bond purchase.…
A: Accrued Interest Interest accrued by a business on a loan or any other financial transaction that…
Q: Hancock Toy Co. had Net Income of $500,000 and paid cash dividends of $200,000 during this year.…
A: Ending equity is calculated using following equation Ending equity for the year = Beginning of the…
Q: Importance of having life insurance
A: Life insurance is an invaluable asset for many people and their families. It is a contract between…
Q: Wade and Wanda Publishing Company is considering an upgrade to the printing facility that produces…
A: When someone invests in a business or an asset, the return is negative until the entire investment…
Q: You have just won the lottery. At the end of each of the next 30 years, you will received a payment…
A: Present value refers to the current value of a future sum of a future stream of cash flows. The…
Q: Aranufacturer of video games develops a new game over two years. This costs $800,000 per year with…
A: NPV is used to measure the profitability of a project. It discounts all future cash flows to…
Q: Since the U.S. company is a buyer, should not it focus on either a Forward contract or a "Call…
A: We have to comment on the selection of the options and the forward contract.
Q: Which of the following statement is incorrect regarding the importance of style analysis? O Style…
A: The style analysis is related to different style of investment according to the investment objective…
Q: Soon fast pls How does Borrowing Affect Earnings per share?
A: Earnings per share is the calculated by dividing earnings available to Common stockholders by Number…
Q: INV3 P1c Bond # 1 2 3 4 1 - year strip bond 2- year strip bond 2-year 6% coupon bond…
A: Purchase Price for the bond) 950
Q: Based on the information below, the levered firm value is at the highest point with Unlevered firm…
A: The debt up to certain limit is very good but beyond certain limit debt is not good because the…
Q: The delta of a call optio is very much in-the-money is likely close to a. 0 delta b. 100 delta
A: Call option is a derivative instrument which the gives the buyer the option but not an obligation to…
Q: What is the new value of equity after the announcement?
A: GIVEN DATA debt to equity ratio is 2.4 return on levered equity =13.23% the cost of debt is 6.50%…
Q: Problem 13-10 Returns and Standard Deviations [LO1] Consider the following information: State of…
A: Standard deviation refers to teh square root of variance that shows the average amount of the mean…
Q: Suppose that the Tbill rate is 3% and the expected return on the market is 9.5%. Consider the…
A: Alpha is the difference between the actual return of the portfolio and the expected risk adjusted…
Q: You are considering two stocks and have determined the following information: Stock A The return on…
A: Solution: Given, Probability of Stock A (P) Return of Stock A(%) = RA E(RA) = RA*P [RA -…
Q: John buys a car for $20,000.00 on Kia finance with a simple interest of 5.99%. After one month he…
A: Simple interest refers to the amount that the lender receives over and above the principal. In…
Q: XYZ Co. will pay a $4.20 per share dividend on common stock at the end of the year. The Ke = 11.8%.…
A: Price of stock can be determined by the dividend discount model based on constant growth rate of…
Q: a finance manager of a company, explain the factors that you should consider when undertaking the…
A: Capital structure is very important for the company and capital structure decides the cost of…
Q: Wildhorse Communication Corp. is considering an investment in new technologies. The company's…
A: The discounted payback period is a modified version of the payback period. It also provides the time…
Q: Your venture has signed a new consulting contract that will require you to invest in new analytical…
A: Modified Internal rate of return is a capital budgeting technique used to evaluate whether the…
Q: How come the Operation of islamic banking be run under the umbrella of state bank of pakistan…
A: Islamic baking there is no interest being charged and as interest is considered the Haram in Islam…
Q: Yellow Submarine, Co. has a cost of equity of 10.99 percent, a cost of debt of 5.44 percent, and a…
A: Cost of equity (Ke) = 0.1099 Cost of debt (Kd) = 0.0544 Tax rate (T) = 0.21 Weight of debt (Wd) =…
Q: A firm can hedge its input prices, which makes it cash flow in one year less risky. In one year, the…
A: We have a situation where a part of the input cost can be hedged. The net cash flow is a function of…
Q: 7 Carvana (CVNA) is suffering with a share price of $3 down from $223 a year ago (yikes!). The…
A: When company thinks that company is facing losses and there are more chances of going to be…
Q: A project requires an initial investment in equipment of $760,000 immediately (t=0) and is expected…
A: Beta Debt Equity XOM 1.00 11.63B 403.10B CVX 1.22 20.02B 224.24B
Q: Using the tax rates for Married Persons Filing Jointly for the Year 2018, what is the amount of…
A: Every person company, the firm has the responsibility to pay taxes to the government on income…
Q: Jersey Jewel Mining has a beta coefficient of 1.1. Currently the risk-free rate is 2 percent and the…
A:
Q: Net WC Long-term assets Sum Debt 80 Equity $100 Sum $20 $40 60 Net WC Long-term assets 140 $160 $100…
A: MM theory theory tells about the market value of the firm based on that it says that value of the…
Q: urces Inc. has the following capital structure: Financing Source Proportion of Capital Structure…
A: Weighted average cost of capital is the weighted cost of equity, weighted cost of debt and weighted…
Q: Calculate the annual interest (in $) and current yield (as a %) of the bond. (Round your percentage…
A: Current yield of a bond is the annual coupon expressed as a percentage of its price. Current…
Q: You purchase an RV by making a down payment of $10,700. The terms of your finance agreement have an…
A: The down payment is $10,700 The annual interest rate is 2.66% compounded monthly The total number of…
Q: TSC, Inc. sells for $23 and pays an annual per share dividend of $1.20, which you expect to grow at…
A: The expected return on the stock will be calculated by using dividend discounting model with…
Q: e dividend-growth model may be used to value a stock: und your answers to the nearest cent. a. What…
A:
Q: Use the table below to answer questions 12 through 15. Portfolio A's Return (%) 2.15 0.89 1.15 -0.47…
A: There are basically two strategies used by the fund managers one is to match the market and other is…
Q: rsey Medical earns $12.50 a share, sells for $100, and pays a so per share dividend. The stock is…
A: Company do the stock split to increase the number of shares and decrease the price of stock in the…
Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…
A: Concept. Net present value is calculated by deducting initial investment from present value of cash…
Q: Cash Flows from Operating Activities-Indirect Method Staley Inc. reported the following data: Net…
A: The question is related to Cash Flow Statement. Cash Flow Statement is summary of cash receipts and…
Q: Assume the following information for a capital budgeting proposal with a five-year time horizon:…
A: The simple rate of return is used in capital budgeting to determine the change in the working…
Q: Question: How can you prove that the conventional bank street the money equal to commodity where as…
A: The concept of money and its role in the economic system has drastically changed over the years. In…
Q: Question 7 The following information about a company is provided: Account Contributed capital,…
A: Total Liability = (Total Asset - contributed Capital - Closing balance of Retained earnings) Closing…
Q: Use the table below to answer questions 12 through 15. What is the portfolio tracking error? O A.…
A: Tracking error of a portfolio is standard deviation of the difference in the return of portfolio and…
Q: Question: What if Islamic banking decision for the very first time, its must-have borrow fund from…
A: Islamic banking has recently become an increasingly popular option for those looking for an…
Q: Paladin Furnishings generated $2 million in sales during 2019, and its year-end total assets were…
A: Sales increase refers to situation where the current sales of a company increases as compared to the…
Q: All of the following are municipal notes EXCEPT A.PN B. TRAN C.AON D. CLN
A: A municipal note is like a bond issued by a local government which promises to pay a certain amount…
Q: P1)The interest rate is 8.3%. A company wants to sell a one-year bond for $1000 today. There is a 2%…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: You are considering investing in three stocks with the following expected returns: Stock A Stock B…
A: Expected return The minimum return all investors expect from the investment made is known as the…
Step by step
Solved in 2 steps
- Parent Company's stockholders' equity as of December 31, 2020 is P7,308,000. On January 1, 2021, Parent acquires 30% of Subsidiary Company's ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. Parent acquired significant influence over Subsidiary as a result of stock acquisition. After four months, Parent purchases another 60% of Subsidiary's ordinary shares for a cash payment of P3,942,000. On this date, Subsidiary reports identifiable net assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000. At the acquisition date, net loss reported by Subsidiary for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. Parent also paid the following: P90,000 for legal fees, P72,000 for finder's fees, P77,400 for accountant's fees, P64,800 for audit…arent Company’s stockholders’ equity as of December 31, 2020 is P7,308,000. On January 1, 2021, Parent acquires 30% of Subsidiary Company’s ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. Parent acquired significant influence over Subsidiary as a result of stock acquisition. After four months, Parent purchases another 60% of Subsidiary’s ordinary shares for a cash payment of P3,942,000. On this date, Subsidiary reports identifiable net assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000. At the acquisition date, net loss reported by Subsidiary for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. Parent also paid the following: P90,000 for legal fees, P72,000 for finder’s fees, P77,400 for accountant’s fees, P64,800 for audit…Parent Company’s shareholders’ equity as of December 31, 2019 is P2,030,000. On January 1, 2020, Parent acquires 25% of Subsidiary Company’s ordinary share for P150,000 cash and by issuing its own shares with fair value of P200,000. Parent acquired significant influence over Subsidiary as a result of acquisition. After three months, Parent purchases another 55% of Subsidiary’s ordinary share for cash payment of P1,100,000. On this date, Subsidiary reports identifiable assets with carrying value of P1,800,000 and fair value of P3,200,000 and it has liabilities with a book value and fair value of P900,000. At the acquisition date, net income reported by Subsidiary for three-month ended amounted to P500,000. The fair value of 20% NCI is P360,000. NCI is valued using the proportionate basis. Parent also paid the following: P25,000 for broker’s fee; P20,000 for pre-acquisition audit fee; P21,500 for legal fees; P18,000 for SEC registration of share issued and P5,500 for printing of share…
- P Company’s shareholders’ equity as of December 31, 2019 is P2,030,000. On January 1, 2020, P acquires 25% of S Company’s ordinary share for P150,000 cash and by issuing its own shares with fair value of P200,000. P acquired significant influence over S as a result of acquisition. After three months, P purchases another 55% of S's ordinary share for cash payment of P1,100,000. On this date, S reports identifiable assets with carrying value of P1,800,000 and fair value of P3,200,000 and it has liabilities with a book value and fair value of P900,000. At the acquisition date, net income reported by S for three-month ended amounted to P500,000. The fair value of 20% NCI is P360,000. NCI is valued using the proportionate basis. P also paid the following: P25,000 for broker’s fee; P20,000 for pre-acquisition audit fee; P21,500 for legal fees; P18,000 for SEC registration of share issued and P5,500 for printing of share certificates. Immediately after the business combinations, what is the…SG Company's stockholders' equity as of December 31, 2019 is P7,308,000. On January 1, 2020, SG acquires 30% of Popsters Company's ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. SG acquired significant influence over Popsters as a result of stock acquisition. After four months, SG purchases another 60% of Popsters' ordinary shares for a cash payment of P3,942,000. On this date, Popsters reports identifiable assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000. At the acquisition date, net loss reported by Popsters for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. SG also paid the following: P90,000 for legal fees, P72,000 for finder's fees, P77,400 for accountant's fees, P64,800 for audit fee and P19,800 for printing of…SG Company’s stockholders’ equity as of December 31, 2019 is P7,308,000. On January 1, 2020, SG acquires 30% of Popsters Company’s ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1,350,000. SG acquired significant influence over Popsters as a result of stock acquisition. After four months, SG purchases another 60% of Popsters' ordinary shares for a cash payment of P3,942,000. On this date, Popsters reports identifiable assets with carrying value of P6,480,000 and fair value of P11,520,000 and it has liabilities with a book value and fair value of P3,240,000.At the acquisition date, net loss reported by Popsters for the four-month ended amounted to P900,000. The fair value of the 10% non-controlling interest is P1,296,000. Non-controlling interest is valued using the proportionate basis. SG also paid the following: P90,000 for legal fees, P72,000 for finder’s fees, P77,400 for accountant’s fees, P64,800 for audit fee and P19,800 for printing of…
- On January 1, 2019, Parent Company acquires 75% (750,000 ordinary shares) of Subsidiary Company for P7,500,000. During this time, the shares of the subsidiary are trading at P8 per share. Moreover, at the date of acquisition, the Subsidiary reports outstanding shares of P4,000,000 and the retained earnings is valued at P2,000,000 and the Subsidiary's inventories is understated by P100,000, equipment with a remaining 5-year life is understated by P600,000 and land is understated by P1,300,000. The Non-controlling interest is valued at P2,375,000 at this date. Parent and Subsidiary furthermore reports net income of P700,000 and P180,000 each respectively and declared dividends of P400,000 and P300,000 each respectively for 2019. What is the Non-controlling interest in net assets arising from the consolidation to be reported at the end of 2019 if the Non-controlling interest is stated at fair value? What is the net income of the Equity Holder's of the Parent to be reported in the…On January 1, 2021, Manette Company acquired 100,000 ordinary shares of Nette Company for P6,000,000. At the date of purchase, Nette had 500,000 outstanding ordinary shares and shareholders' equity of P20,000,000. During the year 2021, Nette reported profit of P1,000,000 and declared and paid cash dividends of P1.50 per share. The fair value of Nette's share at December 31, 2021 was P68. What amount shall Manette Company recognize in profit or loss for the year 2021 if it is able to exercise significant influence over Nette Company as a result of the acquisition? A P950,000 B) P200,000 P350,000 P150,000Parent Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, Parent purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine:1. Goodwill arising from the consolidation if it is to be computed using the proportionate basis or “Partial Goodwill”2. Goodwill arising from the consolidation if it is to be computed using the full (fair value basis of “Full/Gross-up” Goodwill.3. Goodwill arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000.
- P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if it is to be computed using the proportionate basis (or Partial Goodwill).Parent Company started negotiating for the acquisition of 69,000 outstanding shares of Subsidiary Company in July 1, 2021. The offer was to pay P3,200,000 cash and issue 50,000 shares to the stockholders of Subsidiary. On January 2, 2022, the stockholders of Subsidiary accepted the offer. On this date, the fair value of the shares was P2,550,000 which includes a control premium of P50,000. The stockholders’ equity of Parent and Subsidiary at the date of acquisition were as follows (see image below).The fair value and book value of Subsidiary’s identifiable assets and liabilities were the same except for inventory which was overvalued by P50,000 and Equipment which was overdepreciated by P100,000 (remaining useful life of 5 years). Parent opted to measure NCI at fair value. Available information of Parent and Subsidiary for 2022 were as follows (see image below).a. How much is the Net Income Attributable to NCI? b. How much is the Net Income Attributable to Parent? c. How much is the…P Company acquires 15% of Subsidiary Company’s ordinary shares for P500,000 cash and carries the investment using the equity method. A few months later, P Company purchases another 60% of Subsidiary’s ordinary shares for P2,160,000. At that date, Subsidiary Company reports identifiable assets with a book value of P3,900,000 and a fair value of P5,100,000, and it has liabilities with a book value and fair value of P1,900,000. Determine the GOODWILL arising from the consolidation if The fair value of the 25% non controlling interest in Subsidiary Company is P890,000. answer quickly
