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3 years ago

The Rivoli Company has no debt outstanding, and its financial position is given by the following data:

Business

1 answer:

anzhelika [568]3 years ago

7 0

Answer:

Intrinsic value is $45

Explanation:

The starting point to determining Rivoli Company intrinsic value is to compute the earning after tax as shown below:

Earnings after tax=earning before tax*(1-tax rate)

earnings before tax is $600,000

tax rate

earnings after tax=$600,000*(1-0.25)

=$600,000*0.75

=$450,000

Then we need to compute earnings per share;

Earnings per shares=earnings after tax/weighted average number of shares

=$450,000/100,000

=$4.5

Intrinsic value=earnings per share/cost of equity

cost of equity is 10%

intrinsic value=$4.5/10%

=$45

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3 years ago

Irina's personal-use residence was destroyed in a fire in 2020. The fire was deemed a federally-declared disaster, but it is not

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Answer:

The answer is the casualty loss deductible is $44,900

Note: Kindly find an attached copy of the complete question stated above

Sources: the complete question was researched from Course hero site

Explanation:

Solution

Given that

Home purchased by Irina =$250,000

House worth before fire incident = $500,000

Worth of house after fore incident =$200,000

The proceeds received from insurance = $200,00

Now what amount an Irina deduct in 2020 as a result of her loss

Thus

Irina has to be allowed casualty loss deduction:

Personal

(1) Adjusted basis before disaster $250,000

(2) FMV before casualty $500,000

FMV after damage $200,000

(3) Decrease in EMV $300,000

Loss smaller a line $250,000

Less insurance proceed $-200,000

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The casualty loss deductible $44,900

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Note:

FMV =Fair market value

AGI =Adjusted gross income

EMV =Ending market value

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3 years ago