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3 years ago

What is the total stockholders' equity based on the following account balances?

Business

1 answer:

Rashid [163]3 years ago

3 0

Answer:

The total stockholders' equity amounts to $640,000

Explanation:

The total stockholders' equity is computed as:

Total stockholders' equity = Common Stock + Paid-In Capital in Excess of Par + Retained Earnings - Treasury Stock

where

Common Stock is $375,000

Paid-In Capital in Excess of Par is 90,000

Retained Earnings is 190,000

Treasury Stock is 15,000

Putting the values in the above:

= $375,000 + $90,000 + $190,000 - $15,000

= $655,000 - $15,000

= $640,000

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Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

statuscvo [17]

Answer:

The expected return on a portfolio is 14.30%

Explanation:

CAPM : It is used to described the risk of various types of securities which is invested to get a better return. Mainly it is deals in financial assets.

For computing the expected rate of return of a portfolio , the following formula is used which is shown below:

Under the Capital Asset Pricing Model, The expected rate of return is equals to

= Risk free rate + Beta × (Market portfolio risk of return - risk free rate)

= 8% + 0.7 × (17% - 8%)

= 8% + 0.7 × 9%

= 8% + 6.3%

= 14.30%

The risk free rate is also known as zero beta portfolio so we use the value in risk free rate also.

Hence, the expected return on a portfolio is 14.30%

6 0

3 years ago

Mountain Products has decided to raise $6 million via a rights offering. The company will issue one right for each share of stoc

Scorpion4ik [409]

Answer:

Value of one right = $2.63

Explanation:

A right issue is the issue of additional new shares to existing shareholders in proportion to their existing shareholdings at a price less than the current market price.

The value of rights is the difference between the theoretical ex-right price and the right price .

Value of rights= Theoretical ex-right price - Right price

The theoretical ex-right price is the price at which a share is expected to settle after the right issue assuming all the rights are taken

Theoretical ex-rights price = Total value of shares after right issue/Number of shares after right issues

1 unit of old share at $25.25 = $25.25

I unit of right share at $20.00= $20.00

Total value of 2 shares $ 45.25

Theoretical ex-rights price = 45.25/2 =$22.63

Theoretical ex-rights price=$22.63

Value of rights= Theoretical ex-right price - Right price

= 22.63 - 20.00

Value of one right = $2.63

6 0

3 years ago

4. When Jenna confided in Lew and Al that she, too was concerned about adding additional risk, Lew suggested that they explore t

deff fn [24]

Answer:

limited liability company

Explanation:

A limited liability company (LLC) can be regarded as a business structure that is very common in the United States, these business structure can be regarded as a one in which the owners can not be regarded as been personally liable for debts as well as the liabilities of the company. Limited liability companies can be regarded as hybrid entities which is the combination of the features of corporation s well as partnership

6 0

3 years ago

The common stock of Eddie's Engines, Inc., sells for $37.73 a share. The stock is expected to pay a dividend of $3.70 per share

Furkat [3]

Answer:

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 * (1+g) is dividend expected for the next period

g is the growth rate

r is the required rate of return or market rate of return

Plugging in the values for P0, D1, and g, we can calculate the value of r or market rate of return on the stock to be,

37.73 = 3.70 / (r - 0.058)

37.73 * (r - 0.058) = 3.7

37.73r - 2.18834 = 3.7

37.73r = 3.7 + 2.18834

r = 5.88834 / 37.73

r = 0.1560652001 or 15.60652001% rounded off to 15.61%

5 0

3 years ago

You just turned 35 and have been saving for an around-the-world vacation. You want to take the trip to celebrate your 40th birth

Olegator [25]

Answer:

(a) No, there is a Shortfall = $2,965

(b) $25,202.95

Explanation:

As provided current balance: $15,000

Current return on investment = 8%

Assumed this is compound interest as no amount is withdrawn in between.

Therefore, future value of $1 after 5 years @ 8% compounded per year =

1.469

Value of $15,000 on the date of 40th Birthday = $15,000 $\times$ 1.469 = $22,035

There is a shortfall in the budgeted amount = $25,000 - $22,035 = $2,965

If $500 annual contributions are made in the same account then value shall be:

Value of $15,000 = $22,035

Value of $500 = Value of $1 after 5 years = $6.3359

= $500 $\times$ 6.3359 = $3,167.95

Then total balance in account = $22,035 + $3,167.95 = $25,202.95

8 0

3 years ago