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Chang, Inc.'s balance sheet shows a stockholders' equity-book value (total common equity) of $750 comma 500. The firm's ear

Artist 52 [7]

Answer:

The price/book ratio is 2.45

This price/book ratio indicates that the Chang, Inc company has 2.45 higher market value of the stock than the book value of the equity

Explanation:

For computing the price/book ratio, we have to apply the formula which is shown below:

= Market price of equity ÷ book value of equity

where,

the market value of equity = firm's earnings per share × price/earnings ratio × number of outstanding common stock shares

= $3.00 × 12.25 × 50,000 shares

= $1,837,500

And, the book value of equity is $750,500

Now put these values to the above formula

So, the answer would be equal to

= $1,837,500 ÷ $750,500

= 2.45

This price/book ratio indicates that the Chang, Inc company has 2.45 higher market value of the stock than the book value of the equity

4 0

2 years ago

Tracy Company, a manufacturer of air conditioners, sold 270 units to Thomas Company on November 17, 2021. The units have a list

coldgirl [10]

Answer:

November 17, 2021

Dr. Inventory $81,000

Cr. Account payable $81,000

November 26, 2021

Dr. Account Payable $81,000

Cr. Discount Income $2,430

Cr. Cash $78,570

December 15, 2021

Dr. Account payable $81,000

Cr. Cash $81,000

Explanation:

Sales Amount = 270 units x $400 = $108,000

Discount = $108,00 x 25% = $27,000

Net Sales = $108,000 - $27,000 = $81,000

Terms of sale 3/10, n/30 means there is a discount of 3% is available on payment of due amount within discount period of 10 days after sale with net credit period of 30 days.

Payment made on

November 26, 2021

As the payment is made within discount period, so discount will be availed

Discount = $81,000 x 3% = $2,430

Cash received = $81,000 - $2,430 = $78,570

December 15, 2021

As the payment is made after discount period, so no discount will be availed. Full payment of $81,000 will be made.

3 0

3 years ago

ABC Corporation, after many profitable years, declares a one-time special cash dividend of $10.00 per share. After the announcem

Crank

Answer:

1 ABC Jan 100 Call

Explanation:

Although the OCC does not usually adjust the strike price of listed options for regular quarterly cash dividends. This is because they are known quantity that are segmented by the market into options premium.

For special cash dividends, they are not a frequent event hence market does not recognize them. This special cash dividend is $10 per share × 100 shares = $1,000 value per contract. It therefore means that the $1,000 value per contract will be adjusted.

The new strike price will be

= 110 - 10 cash dividend

= 100. It also means that the number of shares covered by the contract does not change.

4 0

3 years ago

Longordia Foods is expecting to generate after-tax income of $1,558,888, $2,933,312, and $3,261,712 for each of the next three y

Digiron [165]

Answer:

30.86%

Explanation:

It is a financial ratio used for the capital budgeting. It is the ratio of the average return generated by the capital asset and the its average book value in the given period.

Formula for ARR is as follow

ARR = Average Net Income / Average Investment

Average Net Income = ( $1,558,888 + $2,933,312 + $3,261,712 ) / 3

Average Net Income = $2,584,637

Average Investment = $8,375,000

Placing values in the formula

ARR = $2,584,637 / $8,375,000

ARR = 0.3086 = 30.86%

6 0

2 years ago

94. Averaging the deviations from the mean for a portfolio of securities will: A. compute the standard deviation. B. compute the

Yuri [45]

Answer: C. equal zero

Explanation:

The mean is average of the portfolio which means that some securities will be more than the mean and some will be less.

Some deviations will be positive, others will be negative.

When these deviations are added together, the negative deviations will cancel out the positive deviations which will lead to the average deviations being 0.

8 0

2 years ago