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erastovalidia [21]
3 years ago
14

The market value balance sheet for Cherry Pie Corp. reflects a cash of $22,000, fixed assets of $209,000, and equity of $231,000

. There are 5,000 shares of stock outstanding with a par value of $1 per share. The company has announced that it is going to repurchase $18,000 worth of stock. Other things equal, what will the price of the stock be after this repurchase?A) $36.60 B) $43.80 C) $50.10 D) $42.60 E) $39.20
Business
1 answer:
Blizzard [7]3 years ago
8 0

Answer:

The correct answer is D.

Explanation:

Equity = $231,000

No. of outstanding shares = 5,000

Price of share = \frac{231,000}{5000}

Price of share = $46.2

Repurchased shares worth $18,000

No. of shares repurchased = \frac{18,000}{46.2}

No. of shares repurchased = 390

When the shares would have been repurchased then the value of equity would decrease by the same amount.

Revised equity = $231,000 - $18,000

Revised equity = $213,000

No. of shares outstanding = 5,000 - 390

No. of shares outstanding = 4,610

Thus, the price of each share would be:

Share price = \frac{213,000}{4,610}

Share price = $42.60

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Flauer [41]

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6 0
2 years ago
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6 0
3 years ago
Which item below is an incorrect statement about the difference between the discount rate and the federal funds rate? a) The fed
mestny [16]

Answer:

a) The federal funds rate has a higher interest rate than the discount rate to encourage borrowing

Explanation:

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These borrowings help the commercial banks meet up their liquidity requirements.

The discount rate is higher than the Fed funds rate. This is to encourage banks to borrow from each other instead of borrowing directly from the Federal Reserve.

The Fed fund rate also tends to affect the prime lending rate (rate at which banks lend money to their clients).

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5 0
3 years ago
Difference between money paid to and money received from other nations in trade is called balance of trade.
frutty [35]

<u>Answer:</u>

Difference between money paid to and money received from other nations in trade is called balance of trade is a <u>TRUE</u> statement.

<u>Explanation:</u>

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6 0
3 years ago
Read 2 more answers
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