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erik [133]
3 years ago
11

Over the years, O'Brien Corporation's stockholders have provided $20,000,000 of capital, when they purchased new issues of stock

and allowed management to retain some of the firm's earnings. The firm now has 1,000,000 shares of common stock outstanding, and it sells at a price of $33.00 per share. How much value has O'Brien's management added to stockholder wealth over the years, i.e., what is O'Brien's MVA?
Business
1 answer:
shepuryov [24]3 years ago
3 0

Answer:

$13,000,000

Explanation:

Given that,

Total Book Value of Equity = $20,000,000

Common stock outstanding = 1,000,000 shares

Selling price per share = $33.00

Market value of equity:

= Selling price per share × Shares outstanding

= $33.00 × 1,000,000

= $33,000,000

O'Brien's MVA:

= Market value of equity - Total Book Value of Equity

= $33,000,000 - $20,000,000

= $13,000,000

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Metro Holdings Inc. contracts to sell a commercial parking garage to New Property LLC. The contract provides that if Metro does
Shkiper50 [21]

The provision is not enforceable if it is a reasonable estimate of the loss on the breach.

Option - b

<u> Explanation: </u>

There are a few solutions for rupture of agreement, for example, grant of harms, explicit execution, rescission, and restitution. In courts of restricted purview, the fundamental cure is an honor of harms.

Since explicit execution and rescission are evenhanded cures that don't fall inside the purview of the officer courts, they are not canvassed in this instructional exercise.  

The count of compensatory harms relies upon the kind of agreement that was broken and the sort of misfortune that was caused. Some broad rules are:  

Standard measure, The standard proportion of harms is a sum that would permit the no breaching gathering to purchase a substitute for the advantage that would have been gotten if the agreement had been performed.

In situations where the expense of the substitute is theoretical, the no breaching gathering may recoup harms in the measure of the expense caused in playing out that gathering's commitments under the agreement.

4 0
3 years ago
Which of the following factors would be most likely to lead to an increase in interest rates in the economy? a. Households reduc
Xelga [282]

Answer:

C. Most businesses decide to modernize and expand their manufacturing capacity, and to install new equipments to reduce labor cost

Explanation:

Interest rate is the cost attached to borrowed money. It is also the return for the risk of lending.

Businesses borrow to make profit in the future. They also borrow to finance the purchase of equipments. The interest on these loan is what stimulate the economy which encourages people to borrow, lend and spend.

When businesses continue to expand their production capacity and also install new equipment, such will lead to an increase in interest rate in the economy because most industries often times raise credit to finance assets purchase. An increase in demand for money raises interest rate and vice versa.

Other causes of high interest rate in an economy are;

- Inflation, which is the consistent rise in the prices of goods and services as a result of too much money in circulation. The higher the rate of inflation, the higher the interest rate.

-Government, through central bank, issuing directives on the effect of monetary policy on interest rate. This is done through open market operation.

When there is lower interest rate in the economy, amount paid as interest by consumers will be less hence have money to spend. This will also affect business as they will be able to buy equipments and produce more with cheap funds.

5 0
3 years ago
What is price skimming?
Vinil7 [7]

Answer:

a strategy where someone sets a high price at first to attract people who like it a lot enough to buy it at that price but slowly lowering it over time so that even people who arent as desperate to buy it will possibly buy it as well.

7 0
3 years ago
Here are the 2015 revenues for the Wendover Group Practice Association for four different budgets (in thousands of dollars):
erastova [34]

Answer: The answer is provided below

Explanation:

a). The revenue here shows that

Wendover's patients were capitated. The is because the actual revenue figures were assumed to be $180, but it

later came to $300 which means that the revenue increased.

The reason is that a capitated patient provides fixed payment a year, while a fee for service client pays per usage. With this explanation, it can be concluded that majority of Wendover's patients are fee for service because the difference between static results and the actual results is very high.

) 1. Revenue variance

= Actual Revenues - Static budget

= $ 300 - $ 425

= - $125

2. Volume variance

= Flexible Revenue - Static Budget

= $ 200 - $ 425

= - $ 225

3. Price Variance

= Actual Revenues - Flexible Revenues

=$300 - $200

= $100

4. Enrollment variance

= Flexible Revenues - Static Budget

= $ 180 - $ 425

= - $ 245

5. Utilization variance

= Flexible Revenue- Flexible Budget

= $ 200 - $ 180

= $ 20

8 0
3 years ago
Read 2 more answers
Producers' total revenue will decrease if A. The price rises and demand is inelastic. B. income increases and the good is a norm
pav-90 [236]

Answer:

The correct answer is letter "C": the price rises and demand is elastic.

Explanation:

Price elasticity of demand describes the relationship between changes in quantity demanded and prices. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price. If the result is equal to or greater than 1, the demand is elastic. This means <em>in front of relatively small changes in price, major changes in quantity demanded will occur. </em>

Therefore,<em> if a good or service increases in price being the product inelastic, the quantity demanded is likely to drop (demand law) implying the producers' revenue will be decreased.</em>

3 0
4 years ago
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