All categories

3 years ago

Touchtech earns revenue when edison purchases 100 shares, even if he purchases them from an existing shareholder.

Business

1 answer:

Strike441 [17]3 years ago

6 0

Answer:

A. An increase in the perceived profitability of Touchtech will likely cause the value of Edison's shares to rise.

B. Expectations of a recession that will reduce economy-wide corporate profits will likely cause the value of Edison's shares to decline

Explanation:

The price of the stock changes only because of the changes in the profitability of the firm. If the company is earning lower profits then the prices of the stock will fall and vice versa. So the option A is correct because increase in profitability increases the value of the shares.

So the main thing here is the profitability of the firm which is affected by the recession in the economy because during the recession period the profitability of the firm decreases and so the value of the stock decreases. So the option B is correct

You might be interested in

The risk-free rate is 4%, the market risk premium is 8%, and the market return is 12%. Stock Y's beta is 1.85 and the standard d

Snowcat [4.5K]

Answer:

18.80%

Explanation:

Data given

Risk free rate = 4%

Beta = 1.85

Market return = 12%

The computation of rate of return is shown below:-

Using CAPM

Rate of Return = Risk free rate + Beta × (Market return- Risk free rate)

= 4% + 1.85 × (12% - 4%)

= 4% + 1.85 × 8%

= 4% + 14.8%

= 18.80%

Therefore for computing the rate of return we simply applied the above formula.

6 0

3 years ago

500 shares of 6%, $100 par convertible preferred stock were issued at $103 per share. Each share is convertible into 20 shares o

SIZIF [17.4K]

Answer:

c) Cr. paid in capital in excess of par, common $1,500.

Explanation:

The journal entry is as follows

Preferred stock Dr $50,000 (500 shares × $100)

Paid in capital in excess of par - Preferred stock $1,500 {500 shares × ($103 - $100)}

To Common stock $50,000 (500 shares × 20 shares × $5)

To Paid in capital in excess of par - Common stock $1,500

(Being the conversion is recorded)

8 0

3 years ago

Suppose a firm incurred explicit costs of $900 and implicit costs of $200 during a day. If that day the firm sold 8 units at $30

likoan [24]

Answer:

d. $1,500 and its economic profits are $1,300.

Explanation:

The computation is shown below

For accounting profit, it is

= Total revenue - Explicit cost

where,

Total revenue is = 8 units × $300 per unit = $2,400

And, the explicit cost is $ 900

So, the accounting profit is

= $2,400 - $900

= $1,500

And, the economic profit is

= Total Revenue - explicit cost - implicit cost

= $2,400 - $900 - $200

= $1,300

Simply applied the above formulas so that the both profits could arrive

5 0

2 years ago

a company recorded an event that had no affect on total assets, net income, or cash flow. this could have been caused by ______.

NemiM [27]

This action could have been caused by writing off an uncollectible account.

A write-off can be described as the removal of an accounts receivable that cannot be collected which was put in the general ledger.

If an account is uncollectible, then it means that the amount that would not be collected would be eliminated. It also means that a previous allowance balance is going to get reduced.

3 0

2 years ago

All of the following are examples of a commodity except

elena55 [62]

The correct answer to this is B) a designer handbag. This is not a commodity. A commodity is anything that is considered a raw material.

3 0

3 years ago

Read 2 more answers