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Margarita [4]
3 years ago
15

Deep Hollow Oil issued 135,000 shares of stock last week. The underwriters charged a spread of 8.05 percent in exchange for agre

eing to a firm commitment. The legal and accounting fees amounted to $418,000 and the company incurred $48,000 in indirect costs. The offer price was $33 a share. Within the first hour of trading, the stock price increased to $36 a share. What was the flotation cost as a percentage of the funds raised?
Business
1 answer:
Neporo4naja [7]3 years ago
6 0

Answer:

The ratio of flotation cost to funds raised is 20.13%

Explanation:

First of all, it is noteworthy that actual amount received per share by Deep Hollow Oil is the issue price minus the underwriting spread of $2.6565 (8.05% of $33),in other words the net issue price is $30.3435

The total amount raised is $ 4,096,372.50 (135000*$30.3435 ),while total flotation costs are as follows:

Underwriting costs                    $ 358,627.50  

Legal and accounting fees       $418,000

Indirect costs                              $48,000

Total flotation costs                   $824,627.50  

However, the flotation costs as a percentage of funds raised is given below:

$824,627.50  /$4,096,372.50=20.13%

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Answer:

The total cost per unit using the weighted average method would be:

$15,97  

Explanation:

                Materials   Conversion Costs  

Begining  $ 14,000         $ 8,000  

APRIL          $ 72,000        $ 80,000  

TOTAL          $ 86,000 $ 88,000  

Units               8,000   8,000  

                       100% 50%  

WIP                4,000   2,000  

TOTAL              12,000   10,000  

USD/Unit          7,17              8,80   $15,97  

3 0
3 years ago
Chris has a job as a sales representative for a pharmaceutical company. The company offers both quarterly and annual bonuses bas
earnstyle [38]

Answer:

c. remuneration of personnel

Explanation:

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One of the fourteen principles being, Remuneration of personnel.

Fayol was of the opinion that in order to extract the best performance from employees, appropriate remuneration system must exist in an organization.

This meant emphasizing on employee satisfaction by following fair remuneration practices coupled with adequate incentive system which rewards good performance.

In the given case, the pharmaceutical company offers performance based incentives in the form of quarterly as well as annual bonuses in addition to an existing profit-sharing plan for employees. This is an example of Fayol's principle of Remuneration of personnel.  

8 0
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The function y= -6(x - 5)2 + 12 shows the daily profit (in hundreds of
tino4ka555 [31]

Answer:

D. Interpretation: The zeros are where the daily profit is $0.00

zeros: x = 3.586 and x = 6.414

Explanation:

We have been given the following daily profit function;

y=-6(x-5)^{2}+12

where y is the profit (in hundreds of  dollars) of a taco food truck

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The zeros of this profit function can be obtained by solving for x in the following equation;

0=-6(x-5)^{2}+12

These will simply be the x-intercepts of the profit function. That is the points where the profit function crosses or intersects the x-axis.

Therefore, an interpretation of the zeros of this function would be;

The zeros are where the daily profit is $0.00

These zeros can be evaluated graphically. We first obtain the graph of the profit function as shown in the attachment below;

We then determine the x values where the graph crosses the x-axis. These values will represent the zeros of our profit function. From the graph, these points are;

x = 3.586 and x = 6.414

8 0
3 years ago
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Answer:

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