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stepladder [879]
3 years ago
13

Lem Co., which accounts for treasury stock under the par value method, acquired 100 shares of its $6 par value common stock for

$10 per share. The shares had originally been issued by Lem for $7 per share. By what amount would Lem's additional paid‐in capital from common stock decrease as a result of the acquisition?
Business
1 answer:
In-s [12.5K]3 years ago
7 0

Answer:

Additional paid in capital decrease by 100 as a result of the acquisition

Explanation:

Treasury Stock 600 (100 shares x $6)

Additional Paid-In Capital 100 (100 shares x $1)

cash 1,000 (100 shares x $10)

Additional Paid-In Treasury Stock 300

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What two possible reasons could cause the required return to differ from the coupon interest​ rate? ​(Select the best answer​ be
mixas84 [53]

Answer:

A. Cost of funds has changed

B. Firm's risk has changed

Explanation:

The required rate of return on bonds refers to an investor's expected rate of return which is based upon rate of return other investors earn in the market on similarly priced bonds. This is also referred to as yield to maturity i.e YTM.

Coupon rate of payment of bond is the interest payment on such bonds which is usually fixed at the time of issue of such bonds.

Required rate of return may differ on account of change in cost of funds to the issuer which is cost of debt denoted as K_{d} . Cost of debt is determined by tax rate and net proceeds from the issue of such bonds.

Required rate of return may also change on account of change in the firm's risk. If the firm assumes more risk, such risk would deter investors from investing in such bonds and in such scenario, the firm has to offer higher coupon rate than the rate prevailing in the market to attract the investors.

5 0
3 years ago
When excess demand exists for tickets to a major sporting event or a​ concert, profit opportunities exist for scalpers?
allochka39001 [22]
Here is the answer. When excess demand exists for tickets to a major sporting event or a​ concert, profit opportunities exist for scalpers because they do work efficiently because they allow ticket prices, especially those in high demand to reach an equilibrium by supplying those who want a ticket at market price allowing them to get one, and by allowing those with utilities below the market price to <span>sell them. With their help, no tickets would be gone to waste. Hope this answers your question.</span>
8 0
3 years ago
Baa-rated bonds currently yield 6%, while Aa-rated bonds yield 4%. Suppose that due to an increase in the expected inflation rat
ollegr [7]

Answer: The new confidence index is 0.7143

Explanation: Consumer confidence index which is known as the confidence index is an index used for estimating the economy of the U.S, it is published by the conference board which shows the decree of excitement in peoples's activities on their savings and spendings.

To calculate the new confidence index;

STEP1: Add the bond increase to the current bond;

6% + 1% = 7%

4% + 1% = 5%

STEP 2: FIND THE NEW CONFIDENCE INDEX

5% ÷ 7% = 0.7143

The old confidence index can also be calculated as

4% ÷ 6% = 0.6667

8 0
3 years ago
In the promotion element of the marketing mix, there are four main areas. Personal selling is direct spoken communication betwee
MAVERICK [17]

Answer: advertising, publicity, and personal selling- that stimulates interest, trail or purchase by final customers or others in the channel.

Explanation: Sales promotion are promotional activities used to stimulate consumers into purchasing a certain product. Sales promotion usually takes the form of giving discounted prices to customers, giving out extra incentive or gift items, freebies, voucher cards, coupon and other promotional offers which gives consumers extra material benefit when they purchase an item. Promotional offers are usually made during certain periods such as festive seasons, company anniversary or occasionally in other to drive sales or to wow customers.

7 0
3 years ago
Read 2 more answers
Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment
user100 [1]

Answer:

The cost recorded for the equipment=$66,500

Explanation:

When dealing with the total cost of an equipment we take the purchase cost and other additional associated costs that come with the equipment. This can be expressed as;

T=P+A

where;

T=total cost

P=purchase cost

A=additional costs(transportation cost+sales tax+installation cost)

In our case;

T=unknown

P=$60,000

A=(1,000+3,000+2,500)=$6,500

replacing;

T=60,000+6,500=66,500

The total cost=$66,500

The cost recorded for the equipment=$66,500

4 0
3 years ago
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