Answer:
Increase
Explanation:
If Bluebird accepts this additional business, the effect on net income will be:
The statement above is FALSE.
Loews conglomeration is into many businesses including hotels, insurance, watches, oil, gas, tobacco, etc. The diversification strategy of the company is to buy up firms that are in financial mess, turn them into profitable ventures and then sell them at a premium. They also diversified by investing into new business fields.
Answer:
Reward to volatility ratio = 0.71
Explanation:
Given the expected risk premium = 10%
Standard deviation = 14%
The rate on treasury bills = 6%
The investment amount that the client chooses to invest = $60000
Expected return of equity = the expected risk premium + The rate on treasury bills
Expected return of equity = 10% + 6% = 16%
Standard deviatin = 14%
Reward to volatility ratio = (expected return - risk free rate) /standard deviation
Reward to voltality ratio = (16% -6%)/14%
Reward to voltality ratio = 0.71
Answer:
Option (A) is correct.
Explanation:
The Journal entry is as follows:
Cash A/c Dr. $400,000
To common stock A/c $160,000
To Paid-in capital in excess of par A/c $240,000
(To record the original sale of the stock)
Workings:
Cash = Number of shares sold × Selling price of each share
= 20,000 × $20
= $400,000
Common stock = Number of shares sold × Par value
= 20,000 × $8
= $160,000
Paid-in capital in excess of par = $400,000 - $160,000
= $240,000
