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Ugo [173]
3 years ago
10

Based on the corporate valuation model, the total corporate value of chen lin inc. is $900 million. its balance sheet shows $110

million in notes payable, $90 million in long-term debt, $20 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. if the company has 25 million shares of stock outstanding, what is the best estimate of its stock price per share?
Business
1 answer:
____ [38]3 years ago
4 0

Stock price would be equal to total value of equity divided by no. of shares outstanding. The total value of equity would be calculated as follows:

Total value of equity = corporate value – notes payable – long term debt – preferred stock

= $900 million - $110 million – 90 million – 20 million

= $680 million

The price of the stock would be:

Stock price = total value of equity / no. of shares outstanding

= $680 million / 25 million

= $27.20

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You just deposited $4,000 in cash into a checking account at the local bank. Assume that banks lend out all excess reserves and
vfiekz [6]

Answer:

a. $33,333

b. $100,000

c. No, it will not.

Explanation:

a. If the reserve requirement is 12 %, how much will your deposit increase the total value of checkable bank deposits?

Money multiplier = 1/r

Where,

r = reserve requirement = 12%, or 0.12

Therefore, we have:

Money multiplier = 1/0.12 = 8.33 times

This means that my deposit will increase the total value of checkable bank deposits 8.33 times. Therefore, we have:

The total value of checkable bank deposits = $4,000 * 8.33 = $33,333  

Therefore, the deposit will increase the total value of checkable bank deposits by $33,333.33.

b. If the reserve requirement is 4 %, how much will your deposit increase the total value of checkable deposits?

r = 4%, or 0.04

We therefore have:

Money multiplier = 1/0.04 = 25 times

This means that my deposit will increase the total value of checkable bank deposits 25 times. Therefore, we have:

The total value of checkable bank deposits = $4,000 * 25 = $100,000

Therefore, the deposit will increase the total value of checkable bank deposits by $100,000.

c. Will increasing the reserve requirement increase the money supply.

No, it will not.

From the above a and b, we can see that the lower the reserve requirement, the higher the money multiplier; while the higher the reserve requirement, the lower the money multiplier.

Therefore, increasing the reserve requirement will not increase the money supply.

8 0
3 years ago
Research asking employees about their benefits has shown that employees:
artcher [175]

In terms of employees researching their benefits means that the employees have underestimate the cost and value of their benefits as they try to research their rights an employer and their benefits or advantages that they should acquire when they are working under a company or other field in their line of work.

5 0
3 years ago
On January 1, 2018,Gillock Climbing Academy instituted a defined benefit pension plan for its employees. The annual service cost
Ivan

Answer:

Find the answer below in explanation

Explanation:

Gillock Climbing Academy Pension Expense for the year 2019 will be recorded as

Service cost ............................................. 600,000.00

Interest (600000 × 10%)................................60,000.00

plan assets (40000 from 2018 + 32000 interest + 400000 made in current year)............... 832000

Expected return Interest on plan asset (832000*8%) ........................................ 66,560.00

Pension Expense for the year ended December 31, 2019 = 600000 -  (66,560.00 - 60000)

= 600,000−6,560

= $593,440.00

3 0
3 years ago
Which demographic category reported the least amount of stress during 1983, 2006, and 2009?
Allisa [31]
<span>Retired people reported the least amount of stress during 1983, 2006, and 2009. Retired people obviously do not have to deal with the stress of a career or job, they most likely do not have to raise children and they are free to engage in any pleasurable activity they please.</span>
3 0
3 years ago
(A bond forward) A certain 10-year bond is currently selling for $920 A friend of yours owns a forward contract on this bond tha
sleet_krkn [62]

Answer: -$100

Explanation:

Value of forward contract = Selling price - Forward price on bond

Forward price = Present value of cashflows + Present value of bond

Periodic rate = 7%/ 2 = 3.5% per semi annum

= 8% / 2 = 4%

3.5% will be used to discount the payment 6 months from now as that is the 6 month rate. The rest will be 4%.

= (80 / (1 + 3.5%) ) + ( 80 / ( 1 + 4%)²) + (940 / ( 1 +4%)²)

= $1,020.342

= $1,020

Value of forward contract = 920 - 1,020

= -$100

4 0
2 years ago
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