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Ierofanga [76]
3 years ago
6

Farrah owns 5,000 shares of stock in DAS, Inc. with a market value of $15,000. DAS declares a 20% stock dividend. After the divi

dend is paid, Farrah owns :
a. 5,000 shares with a market value of $18,000.

b. 6,000 shares with a market value of $15,000.

c. 6,000 shares with a market value of $18,000.

d. 5,100 shares with a market value of $15,300.
Business
1 answer:
Assoli18 [71]3 years ago
8 0

Answer:

Number of shares own will be 6000 and market value will be $15000

So option (b) will be the correct option

Explanation:

We have given that Farrah owns 5000 shares with a market value of $15000

Now it is declare that dividend = 20 % stock dividend

Now after the dividend paid number of shares own by Farrah =5000\times 1.2=6000

As the dividend has only effect on number of shares own so the market value will be the same as $15000

So number of shares own will be 6000 and market value will be $15000

So option (b) will be the correct option

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  • Book Value of the Bond on December 31 this year = $140,000
  • Book Value of the Bond on December 31 next year = $140,000

Calculation of the amount of interest expense should be recorded on June 30 and December 31 of this year

Semiannual Interest Rate = Annual Coupon Rate / 2 = 7.5% / 2 = 3.75%

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The amount of cash is owed to investors on June 30 and December 31 of this year

In this question, cash owed to the investor is the same as the amount paid as interest, so

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Book Value as of Year-End = Face Value + Unamortized Premium

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= Face Value - Unamortized Discount

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