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pickupchik [31]
3 years ago
9

A company has bonds outstanding with a par value of $100,000. The unamortized premium on these bonds is $2,700. If the company r

etired these bonds at a call price of 99, the gain or loss on this retirement is:________.
a. $1,000 gain.
b. $1,000 loss.
c. $2,700 loss.
d. $2,700 gain.
e. $3,700 gain.
Business
1 answer:
Lunna [17]3 years ago
4 0

Answer:e. $3,700 gain.

Explanation:

Par value of Bonds =$100,000    

Unamortized premium= $2,700    

Carrying/ Book value of bonds=  Par value of Bonds +Unamortized premium

= $100,000 + $2,700 =$102,700    

Amount at which bonds retired $100,000 x 99% = $99,000  

Gain on retirement of bonds =Book value of bonds- Amount at which bonds retired

=$102,700- $99,000 = $3,700

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1 year ago
You short sold 500 shares of Jasper stock at $41 a share at an initial margin of 60 percent. What is the highest the stock price
avanturin [10]

Answer:

Px = \frac{[(N*P) +(N*P*M1]/N}{1+ M2}

And if we replace we have this:

Px =\frac{[(500*41) +(500*41*0.6]/500}{1+ 0.4}

Px= 46.857 \ approx 46.86

So then the highest the stock price can go before you receive a margin call if the maintenance margin is 40 percent is $ 46.86.

See explanation below.

Explanation:

For this case we define the following notation:

N= 500 represent the number of stocks for JAsper

P = 41 represent the stock price

M1 = 60% = 0.6 represent the initial margin

Px represent the highest stock price the variable of interest for this case

M2= 40% or 0.4 represent the mainteneance margin

We can find the value of Px with the following formula on this case:

Px = \frac{[(N*P) +(N*P*M1]/N}{1+ M2}

And if we replace we have this:

Px =\frac{[(500*41) +(500*41*0.6]/500}{1+ 0.4}

Px= 46.857 \ approx 46.86

So then the highest the stock price can go before you receive a margin call if the maintenance margin is 40 percent is $ 46.86.

5 0
3 years ago
What is the disadvantage of getting line managers to recruit for a firm?
tankabanditka [31]

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Materials used by Jefferson Company in producing Division C's product are currently purchased from outside suppliers at a cost o
AVprozaik [17]

Answer:

None of the above.

Total Income from operation increase.  12,500.00

Explanation:

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$          10.00 Per unit

  • Inter transfer purchase from Division A

$            9.50 Per unit

  • Saving Per unit

$            0.50 Per unit

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25.000 Units

Total Income from operation increases      12,500.00

4 0
3 years ago
Read 2 more answers
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