Answer:
a. 12%
b. 2% and 10%
Explanation:
a. The computation of the realized return is shown below:
= {(Ending share price - initial price) + Dividend} ÷ (Initial price) × 100
= {$1 + ($55 - $50)} ÷ $50
= 12%
b. The computation of the dividend yield and the capital gain is shown below:
Dividend yield
= (Dividend) ÷ (initial price) × 100
= $1 ÷ $50 × 100
= 2%
For capital gain yield:
= (Ending share price - initial price) ÷ (Initial price) × 100
= ($55 - $50) ÷ ($50) × 100
= $5 ÷ $50 × 100
= 10%
Answer:
No impairment
Explanation:
Since the future net cash flows are still recoverable and they are higher than carrying amount, none needs to be reported
Answer: b. $ 1,900,000
Explanation:
The Net Increase in PBO can be calculated by the formula;
= Prior service cost + Service cost + Interest on the PBO - Benefits paid
= 1,700,000 + 400,000 + 190,000 - 390,000
= $1,900,000
Answer: $837
Explanation:
The following information can be gotten from the question:
Purchase price = $840 per share
Premium of call option = $35 per share
Premium of put option = $32 per share
From the above, the premium received will be:
= $35 - $32 = $3
Investors break even will then be:
= Purchase price - Premium received
= $840 - $3
= $837
