Answer:
The correct answer is letter "D": stop-buy order.
Explanation:
A stop-buy order is an order to purchase a stock at a particular price above its current market price. By placing a stop-buy order, the investor sets the price at which he will buy the stock in advance, thus eliminating the risk of missing the price point, the opportunity to buy a stock with good returns, or covering a short position at a reasonable loss instead of allowing the negative trade balance to rise.
So, <em>setting a stop-buy order will help the trader exit the transaction at a specific price to cover losses of a short position at a reasonable risk rate.</em>
Answer:
$15.625
Explanation:
The computation of the no-arbitrage U.S. price of one ADR is shown below:
= Euro U.S. dollar spot exchange rate × closing price per share × number of shares
= €.625 × €5 per share × 5 shares
= $15.625
Simply we multiply the Euro U.S. dollar spot exchange rate with the closing price per share and the number of shares so that the correct price of one ADR can be come
Answer:
$12,600
Explanation:
Annual Dividend to preferred stock = $1,140,000 × 7%
= $79,800
A schedule of preferred stock dividend in Arrears is as follows :
Dividend Paid Arrears
2016 $79,800 $54,000 $25,800
2017 $79,800 $54,000 $51,600
2018 $79,800 $131,400 0
Dividends of $131,400 has to be paid in 2018 to cover all the arrears.
Principle : Preference dividends (and their arrears if cumulative) are paid first before dividends distribution to common stock holders.
Common Stock Holders receive the remaining amount of dividends of $12,600 ($144,000 - $131,400)
Answer:
Risk is higher if a company has more assets.
Explanation:
All of the following statements are true and correct;
1. Higher financial leverage involves higher risk.
2. Risk is higher if a company has more liabilities.
3. The debt ratio is one measure of financial risk.
4. Lower financial leverage involves lower risk.
However, it is false and an absolutely incorrect to say risk is higher if a company has more assets.
A company having more assets would have a debt ratio less than one (1) because it has many assets to fund it's business. Thus, the company would have little or no debts and as such, it's risk portfolio is very low.
Hence, risk is lower if a company has more assets.