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velikii [3]
3 years ago
13

LPM company is a furniture 5 points manufacturer having a current market price of $70 per share. Mrs. Jennifer is a warrant hold

er at LPM. She can purchase 1 share of stock per warrant at a price of $74. After 2 months, the stock price of LPM has fallen to $60 per share. What is Mrs. Jennifer's exercise value? *
Business
1 answer:
nikklg [1K]3 years ago
8 0

Answer:

-$14 per share

Explanation:

The exercise value is the monetary value of Mrs. Jennifer's call option if she was going to exercise it. The exercise value is calculated by subtracting the current stock price from the strike price = $60 - $74 = -$14.

Since no one would exercise a stock warrant knowing that they will lose money, we can expect that Mrs. Jennifer does not exercise her call option. If she really wanted to purchase a stock from LPM it would be cheaper to buy it at its current market price.

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Tarazzz Company manufactures computers. The following cost information for the manufacture of one computer has been compiled. Di
zalisa [80]

Answer:

Company net income will DECREASE by $2,000 if the order is accepted.

Explanation:

Company net income will DECREASE by $2,000 if the order is accepted.

Additional order will produce additional sales revenue of $150 per unit

The marginal cost for this order = Variable costs (Direct material + Direct labour + variable cost) =$152 per unit

Since the marginal cost ($152) is more than the revenue ($150)per unit, there will be a loss of $2 per unit.

So the net income of the company will DECREASE by $2000 ($2x 1000)

3 0
3 years ago
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Answer:

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4 0
3 years ago
The valuation calculating the present value of a future cash flow to determine its value today is called __________ valuation.
nydimaria [60]

Answer:

Discounted cash flow(DCF).

Explanation:

This is explained to be an investment analysis model which is seen to calculate the value of investment on the basis of its future value. Thus evaluation model is seen to be discounted back to a present value in which time value of money is been used as a factor and is been put into consideration. It is also explained that investment’s worth is equal to the present value of all projected future cash flows. Cases directs us to see that boards are seen to subtract the amount spent on the investment from the present value of future cash flows to calculate the net present value of the investment. Therefore, they can easily sum how much the investment will make in today’s dollars and compare it with the cost of the investment.

3 0
3 years ago
A recession within a nation will _________ imports directly, but the impact on the national economy is negative.
katen-ka-za [31]

A recession within a nation will <u>reduce</u> imports directly, but the impact on the national economy is negative.

Monetary policy. monetary policy consists of the steps the central bank of a nation can take in order to regulate the nation's money supply. For example, a central bank might reduce interest rates during a recession in order to make loans more readily available to other banks and thus stimulate economic recovery.

During a recession, the economic struggles, people lose work, companies make fewer sales, and the country's overall economic output decline. The point at which the financial system officially falls right into a recession relies upon an expansion of things.

Monetary policy can offset a downturn due to the fact that decreased interest rates reduce consumers' cost of borrowing to shop for large-ticket objects such as cars or homes. For firms, the economic policy also can reduce the value of an investment.

Learn more about Monetary policy here brainly.com/question/13926715

#SPJ4

4 0
2 years ago
When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off.
blondinia [14]
It is true because a country that imports a tariff on shoes buyers of shoes in that country don’t do well so the answer would be True
7 0
2 years ago
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