Might bring me a piece of paper

Assume that Plavor Brands, Inc. has 10,000,000 common shares outstanding that have a par value of $2 per share. The stock is cur

Kay [80]

Answer:

The multiple choices:

Earnings per share will remain the same since a stock dividend does not create an expense.

Earnings per share will increase because the dividend increases the value of the company.

Earnings per share will decrease because the number of shares outstanding will go up.

The impact cannot be determined without additional information on the new price per share.

The correct option is earnings per share will decrease because the number of shares outstanding will go up.

Explanation:

Initial EPS=earnings attributable to common stock/average weighted number of common stock

earnings attributable to common stock is $25,000,000

average weighted number of common stock is 10,000,000

Initial EPS=$25,000,000/10,000,000

=$2.5

EPS with 10% stock dividend :

average weighted number of common stock=10,000,000*(1+10%)

average weighted number of common stock=10,000,000*(1+0.1)

average weighted number of common stock=11,00,000

EPS with 10% stock dividend=$25,000,000/11,000,000

=$2.27

EPS reduced from $2.5 to $2.27 due to 10% stock dividend as there are more shares than previously.

8 0

2 years ago

Assume that Solo Company commenced operations on January 1, 2006, and it was granted permission to use the same depreciation cal

Musya8 [376]

Answer: c. The firm's cash position in 2006 and 2007 would increase.

Explanation:

Depreciation expense is heavily dependent on the useful life of the asset. The longer the useful life, the smaller the depreciation expense because the equipment is being depreciated over a longer period.

If the useful life is reduced from 15 to 10 years therefore, the depreciation expense would increase.

The Cash position of a company is calculated by adding back the depreciation to the Net income after taxes are paid because depreciation is not a cash expense.

If the depreciation is now larger (which it is) and is added back to the Net income, the cash position will therefore increase.

6 0

2 years ago

You have a credit card bill from ABC Credit for a total of $3,754. Please group the transactions within the appropriate T-Accoun

algol13

The T-Account can be made as follows with the credit of $3,754. The expenses are deducted from the balance as the total credit available.

<h3 /><h3>What is Expense?</h3>

Expenses are the costs that are paid by businesses, these costs are incurred for the operations of business. The expenses are paid from the cash/ bank balance available at the business.

It is recommended that the expenses are in a control and are lower than the revenue generated by the business.

T-Account

Operating Expense Account

$420

$250

$100

$250

Petty Expenses Account

$150

$100

Asset Account

$1500

$650

$334

The account are made according to the nature of expenses, there are two expenses that are not to be classified as an expense instead they need to be treated as a capital expenditure that is to be posted in Asset account.

Expenses with one off event and small amount and in general in nature are posted in petty expenses

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4 0

1 year ago

Bob is evaluating a bond issue to determine the right price for the bond. In his evaluation, he gathers the following informatio

Elanso [62]

Answer:

The price of the bond is $1000. Thus, option a is the correct answer.

Explanation:

The price of a bond is calculated using the present value of the interest payments made by the bond, which is in the form of an annuity, plus the present value of the face value of the bond. The present value is calculated by discounting the annuity of interest and the face value by the YTM or yield to maturity. In case YTM is not provided, we assume that it is same as or equal to the coupon rate paid by the bond.

The formula for the price of the bond is attached.

Bond Price = 25 * [(1 - (1+0.025)^-8) / 0.025] + 1000 / (1+0.025)^8

Bond Price = $1000

5 0

3 years ago

What is the term of shipping directly from the supplier to the end consumer rather than from the seller, saving both time and r

Citrus2011 [14]

The term which describes the shipping who directly supplies from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs is "Drop Shipping."

<h3>What is drop shipping?</h3>

When a vendor creates a website & sells items that they do not maintain in stock, this practice is known as drop-shipping.

Some key features of drop shipping are-

A third party, such as a manufacturer, another store, or a wholesaler, receives an order from the seller and ships the products straight to the customer.
A rapidly spreading trend involves online middlemen who charge you more money by keeping the difference between both the wholesale and prices.
Although drop-shipping is not prohibited, there is a lot of potential for issues and abuse on the part of both customers and sellers.
Following an online purchase, the drop-shipping company sends the ordered item directly to the consumer.
It provides both big and small businesses with a way to source goods, earn some extra cash, and free up some storage space.

To know more about drop shipping, here

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7 0

1 year ago