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poizon [28]
3 years ago
5

The Greenbriar is an all-equity firm with a total market value of $584,000 and 22,800 shares of stock outstanding. Management is

considering issuing $197,000 of debt at an interest rate of 10 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities
Business
1 answer:
stepladder [879]3 years ago
6 0

Answer:

7,691 stocks

Explanation:

total market value = $584,000

total outstanding stocks = 22,800

price per stock = $584,000 / 22,800 = $25.614 per stock

management can repurchase $197,000 / $25.614 per stock = 7,691.1 = 7,691 stocks

stocks outstanding after repurchase = 22,800 - 7,691 = 15,109 stocks

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Which of the following statements is correct?A.The payment of a cash dividend reduces net income.B.Cash received from issuing co
ioda

Answer:

B.Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows.

Explanation:

As when common stock is issued, it provides cash to the company, for any kind of investments, or expense to be made, for running the business.

Financing activities are those which arrange monetary assets generally cash for the company, issue of securities, issue of bonds, borrowings as loans or note payable.

Thus, the statement B is correct.

Further dividends are provided after tax, and are distribution from net income, but not shown under that.

Providing services on account will provide revenue and net income will increase.

Purchasing of any equipment is investing as it will create an asset for the company.

7 0
3 years ago
Under the double-entry system of accounting, a debit is always a negative entry.
mrs_skeptik [129]

It is a false statement that a debit is always a negative entry under the double-entry system of accounting,

<h3>What is the double-entry system?</h3>

In accounting, this refers to the system for recording transactions based on recording increases and decreases in accounts so that debits equal credits.

Hence, the double-entry system requires that each transaction must be recorded in at least two different accounts.

Read more about double-entry system

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8 0
1 year ago
In a retail cash sales environment, which of the following controls is often absent?
JulijaS [17]

Answer:

The correct answer to the following question is option b) Separation of functions.

Explanation:

In a retail environment , the cash management process starts when a customer pays the cashier for the product or services he or she has purchased. The cashier then counts the cash in till drawer and then at end of the day cashier takes that cash to the third party who can be either manager or owner or a supervisor. Then cashier would receive a receipt against the cash for till drawer.

Now supervisor would collect cash from all the cashier and prepare the cash to be deposited in bank. So from this process it is quite clear that here there is separation of functions here and while all other options given in the question are present in the process.

6 0
3 years ago
Mariano Manufacturing can issue a 25-year, 8.8% annual payment bond at par. Its investment bankers also stated that the company
aivan3 [116]

Answer: 10.13%

Explanation:

The after-tax return on the preferred shares would be:

= After-tax return + Premium required

= (8.8% * (1 - 25%)) + 1%

= 7.6%

For the preferred stock to be issued at par with the above after tax return:

= After tax return / ( 1 - tax)

= 7.6% ( 1 - 25%)

= 10.13%

4 0
2 years ago
Park, Inc. acquired 100% of Gravel Co.'s net assets. On the acquisition date, Gravel's accounting records reflected $50,000 of c
Akimi4 [234]

Answer:

The  $400,000 should be a result of the acquisition of the in-process research and development activities

Explanation:

Intangible Assets: The intangible assets are those assets that cannot be seen or even touched. It is not tangible in nature

The example is goodwill, and intellectual properties like - patents, copyrights, trademarks, etc.  

The recording of the intangible assets based on the fair market value i.e $400,000 instead of associated costs.

5 0
3 years ago
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