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Juliette [100K]
3 years ago
10

Sally and Alicia currently are general partners in a business located in Atlanta, Georgia. They are content with their current t

ax situation but are both very uncomfortable with the unlimited liability to which they are each subjected. Which form of business entity should they consider to replace their general partnership assuming they wish to remain the only two owners of their business
Business
1 answer:
Sonbull [250]3 years ago
7 0
Limited liability company is a distinct legal entity where members can held personally liable for the debts and liabilities for the company. Limited liability partnership combines characteristics of a partnership or corporation or sole proprietorship.

As in the given case, both sally and alice are uncomfortable with current tax situation as both are suffering with unlimited liability. it is better for them to opt limited liability partnership where in which persons are not held personally liable.
You might be interested in
A bank has written a call option on one stock and a put option on another stock. For the first option the stock price is 50, the
iris [78.8K]

Answer:

10-Day 99% VaR = 3.61

Explanation:

Data Given:

For First Option:

Stock Price = 50

Strike Price = 51

Volatility = 28% per annum

Time to maturity = 9 months

For Second Option:

Stock Price = 20

Strike Price = 19

Volatility = 25% per annum

Time to maturity = 12 months or 1 year

Risk Free Rate = 6% per annum

Correlation = 0.4

Find 10-day 99% VaR.

Solution:

First of all we need to refer the DerivaGem Model to dig out the change in price equation for both the options.

So, according to DerivaGem Model, We have following data:

For First Option:

Value  = -5.413

Delta Value = -0.589

For Second Option:

Value = -1.014

Delta = -0.284

Change in Price = (Delta value of First Option x Stock Price)Y1 + (Delta value of the second option x Stock Price)Y2

Change in Price = (-0.589 x 50)Y1 + (-0.284 x 20)Y2

So, We will get the Change in Price Linear Equation for both the options.

Change in Price = -29.45Y1 -5.68Y2

Now, we have to calculate the Daily Volatility Percentage.

Formula:

Daily Volatility Percentage = Volatility/ Square root of number of days active in annum

Number of Days Active = 252

Volatility for First Option = 28%

Volatility for Second Option = 25%

Daily Volatility Percentage for First Option = 28%/\sqrt{252}

Daily Volatility Percentage for First Option = 0.0176

Similarly,

Daily Volatility Percentage for Second Option = 25%/\sqrt{252}

Daily Volatility Percentage for Second Option = 0.0157

Now, utilizing the above calculated data, we can find the one-day variance of change in price.

1-Day Variance =(29.45^{2} *0.0176^{2}) + (5.68^{2} * 0.0157^{2}) - (2 * 29.45 * 0.0176 * 5.68 * 0.0157 * 0.4)

Solving the above equation:

We get:

1-Day Variance = 0.2396

Now, we have to find the standard deviation of 1-Day Variance:

SD of 1-Day Variance = \sqrt{0.2396}

SD of 1-Day Variance = 0.4895

So,

Now, in order to find the value of one day 99% VaR from the table, we have all the prerequisites.

So,

Value of One day 99% VaR from table = 2.33

But we need 10-Day 99% VaR.

So, number of days = 10

Hence,

10-Day 99% VaR = 0.4895 * 2.33 * \sqrt{10}

10-Day 99% VaR = 3.61

8 0
2 years ago
Allen, inc., has a total debt ratio of .34. what is its debt-equity ratio
lawyer [7]
Total debt ratio is the ratio of total debt to total assets 
i.e 
Total debt ratio = Total debt / Total assets  
But Total assets is nothing but total equity plus total debt  
Now let us consider, 
TD = Total debt  
TE = Total equity 
TA= Total assets   
Therefore, 
Total debt ratio = TD/TA 
But as mentioned above 
TA = TD + TE  
total debt ratio = Total debt/(total debt+total equity) 
total debt ratio = .34(given) 
.34 = TD / (TD + TE)  
Solving this equation yields:  
0.34 = 1/(1+ TE/TD) 
0.34(1+TE/TD) = 1 
0.34 + 0.34TE/TD =1 
.34(TE/TD) = 1 - 0.34 
0.34 (TE/TD) = 0.66 
0.34TE = 0.66TD  
Now, Debt equity ratio is the ratio of Total debt to total equity  
Debt-equity ratio = TD / TE 
Debt-equity ratio = 0.34 / 0.66 
Debt-equity ratio = 0.51515152
6 0
3 years ago
Matthew Granger is a member of the board of directors at Produxicore Inc. Over a period of one year, Matthew failed to attend mo
FrozenT [24]

Answer: Negligence of duties

Explanation:

As a board member it's one of his primary duty to keep abreast of the firm performance. Not been aware for a year on the excuse of not been informed and not seeking to find out personally shows a negligence of duties.

7 0
3 years ago
Hourly, blue collar jobs always pay less than salaried, white collar jobs.
mr Goodwill [35]
Im pretty sure its false.
4 0
3 years ago
Read 2 more answers
Stark Industries was just rated number one for job satisfaction on a survey compiled by an outside entity. The report cited that
Xelga [282]

Answer:

organizational commitment; perceived stress

Explanation:

Organizational commitment is the psychology of the employee towards his organization. This may be good and bad. If employee is happy with his work environment he will try to give the 100% of his job and its increases his working capacity. Employee think good about his organization and want stick with the organization passionately for a longer time. So they have low level of perceived stress.

According to the analysis, strong organizational commitment and reported low levels of perceived stress is the reason that stark industries was rated number one for job satisfaction.

3 0
3 years ago
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