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2 years ago

What is the maximum potential loss for a customer who is short 100 shares of ABC stock at $33 and short 1 ABC Jan 35 Put at $6?

Business

1 answer:

damaskus [11]2 years ago

8 0

Answer:

Unlimited loss potential

Explanation:

The maximum potential loss for a customer who is short 100 shares of ABC stock at $33 and short 1 ABC Jan 35 Put at $6 will be unlimited.

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2 years ago

The following information was collected for the first year of manufacturing for Appliance Apps: Direct Materials per Unit $2.50

lara31 [8.8K]

Answer:

Results are below.

Explanation:

First, we need to calculate the total unitary variable cost:

Total unitary variable cost=2.5 + 1.5 + 0.25 + 1.5

Total unitary variable cost= $5.75

Now, the variable costing income statement:

Sales= 33,000*12= 396,000

Total variable cost= (33,000*5.75)= (189,750)

Total contribution margin= 206,250

Fixed Manufacturing Expenses= (117,000)

Fixed Selling and Administration Expenses= (21,000)

Net operating income= 68,250

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3 years ago

A company has Net Income of $10, which included $2 of depreciation expense. There were no other noncash expenses in Net Income a

alexandr402 [8]

Answer:

Explanation:

The company's cash flow from operating activities can be calculated as follows:

Net Income 10

Add:depreciation expense 2

Less:changes in accounts receivable (5)

(20-25)

Less:changes in accounts payable (10)

(5-15)

Add:changes in inventory 5

(12-7)

Cash flow from operating activities 2

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3 years ago

Ray Stokes is raising capital for a new company called NO Balloons Inc. NO Balloons will manufacture and sell festive balloons.

Sergeeva-Olga [200]

Answer:

NO Balloons' WACC = 7%

Explanation:

WACC = Weighted average cost of capital

The weighted average cost of capital (WACC) refers to calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

Respective calculation of WACC:

Step 1: Calculate the value of equity:

Number of shares = 12 million

Share price = $19.5 per share

Value of equity = 12 million shares * 19.5/share = $234 million (A)

Step 2: Calculate the value of debt:

Bonds = 200,000

Value of debt = 200,000 bonds * 1000 face value/bond * 89% sale price = 178 million (B)

Step 3: Calculate the firm value:

Total firm value (A+B) = 234 + 178 = 412 million

Step 4: Calculate the weight of equity:

Dividing the value of equity to total firm value:

Weight of equity = 234 / 412 = 0.5680

Step 5: Calculate the weight of debt:

Dividing the value of debt to total firm value

Weight of debt = 178 / 412 = 0.4320

Step 6: Calculation of WACC :

WACC = weight of equity * cost of equity + weight of debt * cost of debt = 0.5680 * 9.275% + 0.4320 * 4% = 7%

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2 years ago

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3 years ago

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