Answer:
5.75%
Explanation:
The computation of the yield on a bond with three years to maturity is shown below:
Given that
Yield on a one-year bond is 3%
The expected yield on one-year bonds for the next two years is 5% and 4%
And, the liquidity premium is 1.75%
So, the yield on a bond with three years to maturity is
= (3% + 5% + 4%) ÷ 3 years + 1.75%
= 4% + 1.75%
= 5.75%
Answer:
C. $40,000
Explanation:
For computing the amount of the gain recognized, first we have to calculate the gain recognized based on the adjusted basis
= Cash received + fair market value of the stock - adjusted cash basis
= $40,000 + $60,000 - $35,000
= $100,000 -$35,000
= $65,000
But the cash is received for $40,000. So, only $40,000 of gain would be recognized. As in the case of transfer, if the amount is received other than the stock so the amount which is received is recognized as a gain i.e $40,000
Answer:
Liabilities increase and assets decrease.
Hope this helps!
