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shutvik [7]
3 years ago
8

On July 1, year 2, Metaro Corporation purchased for $108,000, 2,000 shares of Jean Corporation’s newly issued 6% cumulative $20

par value preferred stock. Each share also had one stock warrant attached, which entitled the holder to acquire, at $19, one share of Jean $10 par value common stock for each two warrants held. On July 2, year 2, the market price of the preferred stock (without warrants) was $50 per share and the market price of the stock warrants was $10 per warrant. On September 1, year 2, Metaro sold all the stock warrants for $19,800. What should be the gain on the sale of the stock warrants?
Business
2 answers:
Verizon [17]3 years ago
7 0

Answer:$1,800

Explanation:

The first step is to calculate the amount of purchase price allocated to the stock and to the warrants. This allocation is made on the basis of the ratios of the relative fair market values of the stock and warrants over the total fair market value of stock and warrants. The combined fair market value is $60 ($50 stock + $10 warrants). The allocation is Warrants:$10/$60 × $108,000 = $18,000 Stock: $50/$60 × $108,000 = $90,000 The final step is to compute the gain or loss on the sale of warrants by comparing the purchase price allocated to the warrants with the selling price of the warrants. The selling price was $19,800 and the allocation of purchase price was $18,000; therefore, the gain on the sale of warrants was $1,800

astra-53 [7]3 years ago
3 0

Answer:

The gain on the sale of the stock warrants should be $1,800.

Explanation:

Allocate the purchase price of $108,000 to stock and warrants on the basis of their fair values.

Total Fair value = Fair value of stock + Fair value of warrant = $50 + $10 =$60

Allocation of Purchase price

Stock = $108,000 x $50 / $60 = $90,000

Warrant = $108,000 x $10 / $60 = $18,000

now the purchase value of warrant is $18,000

Gain on sales is the net of the Sale proceeds and the purchase price of the warrant.

Gain on sale of warrant = Sale proceeds - Purchase value = $19,800 - $18,000 = $1,800

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a treasury bill has a face value of $65,000, an asked yield of 3.05%, and matures in 60 days. what is the price of this bill?
Nataliya [291]

the price of this bill is $64669.58 in 60 days.

In this question the given things is:

a treasury bill has a face value of $65,000.

yield percentace = 3.05%

time = 60days

the price of this bill = a face value of a treasury- (a face value of a treasury *yield percentage * given time per year)

the price of this bill = $65,000 - $65,000*(3.05/100)*(60/360)

the price of this bill =$64669.58.

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Bramble Corp. sells MP3 players for $60 each. Variable costs are $30 per unit, and fixed costs total $120000. How many MP3 playe
VMariaS [17]

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Giving the following information:

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<u>To calculate the number of units to be sold, we need to use the following formula:</u>

Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit

Break-even point in units= (120,000 + 300,000) / 30

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3 0
3 years ago
Dusty is evaluating two bids to supply fence hardware for the 5 acres of pasture that need to be fenced. breezy submits a bid of
Allushta [10]
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2. Use related words in a creative way.

3. Keep it simple.

4. Don't copy your competitors.

5. Avoid using your own name.

6. Choose a name that's scalable.

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3 years ago
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rodikova [14]

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