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svetlana [45]
3 years ago
5

First Link Services granted 4.4 million of its $1 par common shares to executives, subject to forfeiture if employment is termin

ated within four years. The common shares have a market price of $5 per share on the grant date of the restricted stock award. 1. Ignoring taxes, what is the total compensation cost pertaining to the restricted shares? 2. Ignoring taxes, what is the effect on earnings in the year after the shares are granted to executives? (For all requirements, enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).)
Business
1 answer:
EastWind [94]3 years ago
5 0

Answer and Explanation:

First Link Services granted

1. Total compensation

$4.4 million × $5

=$ 22 million

2.

Dr Compensation Expenses 11 million

Cr Paid in capital restricted stock 11 million

Dr Paid in capital restricted stock 22 million

Cr Common stock 4.4 millon

Cr Paid in capital excess of 17.6 million

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For the following investments, identify whether they are: Trading debt securities. Available-for-sale debt securities. Held-to-m
AnnyKZ [126]

Answer:

(a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is expected next month, it will be sold.  - <u>Trading Debt Securities</u>

Trading debt securities such as these are held only for a short time before they are sold with the goal being short term profit.

(b) 10% of the outstanding stock of Farm-Co was purchased. The company is planning on eventually getting a total of 30% of its outstanding stock.  - <u>None of the Above</u>

This is an Equity Investment.

(c) Bonds were purchased in December of this year. The bonds are expected to be sold in January of next year.  - <u>Trading Debt Securities</u>

Like the bond in (a), this is being held for a short while only and then it will be sold so it is a Trading debt security.

(d) Bonds that will mature in 5 years are purchased. The company would like to hold them until they mature, but money has been tight recently and they may need to be sold.  - <u>Available-for-sale debt securities</u>

Available for sale debt securities are to be sold before maturity and therefore have no certain selling time. The bond above has no selling time as it might be sold at any point so it is an Available-for-sale debt security.

(e) Preferred stock was purchased for its constant dividend. The company is planning to hold the preferred stock for a long time.  -<u> None of the above.</u>

This is an Equity investment as well.

(f) A bond that matures in 10 years was purchased. The company is investing money set aside for an expansion project planned 10 years from now. - <u>Held-to-maturity debt securities.</u>

Held to Maturity bonds are bought with no intention of selling and the company hopes to hold them till they mature like this bond which will be held for 10 years.

7 0
2 years ago
An investor can invest money with a particular bank and earn a stated interest rate of 13.20%; however, interest will be compoun
mr_godi [17]

The effective compound interest rate is 13.87%.

<h3><u>What is Compound Interest?</u></h3>
  • The interest on a loan or deposit that is calculated based on both the initial principle and the accumulated interest from prior periods is known as compound interest (also known as compounding interest).
  • Compound interest, sometimes known as "interest on interest," is said to have its roots in 17th-century Italy. Compared to simple interest, which is calculated solely on the principal amount, it will cause a sum to grow more quickly.
  • The frequency of compounding determines the rate at which compound interest accumulates.
  • The compound interest increases with the number of compounding periods.
  • For instance, during the same period of time, the amount of compound interest accrued on $100 compounded at 10% yearly will be less than $100 compounded at 5% semi-annually.

Nominal = interest rate

That is Nominal rate is also known as interest rate.

Nominal rate =  13.20%

The invested money is compounded quarterly.

Periodic = 13.2%/4 (quarterly)

Periodic rate = 3.30%

Now,

The interest rate that accounts for compounding over a specific time period is called the Effective Annual Interest Rate (EAR). The rate of interest that an investor can earn (or pay) in a year after taking into account compounding is known as the effective annual interest rate, to put it simply.

Effective annual rate = EFF% = [1 + (0.13200 / 4)]⁴ - 1 = 13.87%

Know more about Compound Interest with the help of the given link:

brainly.com/question/14295570

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3 0
1 year ago
Absorbing markov chains are used in marketing to model the probability that a customer who is contacted by telephone will eventu
zhannawk [14.2K]
<span>Absorbing markov chains are used in marketing to model the probability that a customer who is contacted by telephone will eventually buy a product. consider a prospective customer who has never been called about purchasing a product.</span>
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One way that you can create your personal brand online is to keep a____ A) Journal b)blog c) email . Not only can you post your
Firdavs [7]

Answer:

b)blog

a) Branding

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The blog is a social media content strategy that gives the creator the autonomy to decide what personal content he wants to show to the public. It has a broad space to include different topics and always allow to detail the professional skills of the autor.

This tool is very usefull to create a personal brand that shows to job recruiters the advantages of hiring you.

3 0
3 years ago
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9. Mackenzie PLC is considering expanding a production line. The new equipment for the line will cost $255,000. In addition, the
NNADVOKAT [17]

Answer:

Net Present Value = $59,632.78

Explanation:

<em>The net present value NPV) of a project is the present value of cash inflow less the present value of cash outflow of the project. </em>

<em>NPV = PV of cash inflow - PV of cash outflow </em>

Present value of cash inflow:

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=1,500 × (1- 1.09375^(-4))/0.09375

=4819.84773

NPV = 26882.7792  - 4819.84773 - (255,000+12250)

= 59,632.78

8 0
3 years ago
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