Answer:
The correct answer is: option D
Explanation:
The degree of operating leverage (DOL) is a measure used to evaluate how a company's operating income changes after a percentage change in its sales. A company's operating leverage involves fixed costs and variable costs. It is a financial ratio that measures the sensitivity of a company’s operating income to its sales. This financial metric shows how a change in the company’s sales will affect its operating income.
There are two main formulas to calculate the DOL:
DOL= Contribution Margin/ Operating Income
or
DOL= [Qx(P-V)] / [QX(P-V)-F)
Where:
Q: the number of units
P: the price per unit
V: the variable cost per unit
F: the fixed costs
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
Answer:
10%
The investor will be credited with the interest at the rate of 10%.
Explanation:
Cap on interest rate which is going to be credited = 10%
Participation=80%
Increase in reference index = 15%
As the participation rate is 80% so the investor can credit the amount of 80% * 0.15= 12% (15% of 80%) but as it is given in the question, the cap of 10% is put on the interest rate credited so the investor will be credited with the interest at the rate of 10%.
Answer:
When shares are repurchased, they are recorded at the cost price in the books which means that they will be recorded at:
= 100 * 40
= $4,000
Cash will then be credited because assets are credited when they reduce.
Treasury stock will be debited to show that Equity is reducing.
Date Account Title Debit Credit
June, 30 Treasury Stock $4,000
Cash $4,000
Answer:
Part (a)
The percentage ownership of Mr. John is 20% + (80% x 20%) = 36%
Part (b)
The percentage ownership of Mr. Brian is 30% + 30% = 60%
Part (c)
The percentage ownership of Mr. Charlie is 30% + 30% = 60%
Part (d)
The amount that could be recognized for the purposes of tax would be $0, as Mr. Brian owns more than half that is more than 50% of XYZ Corp. either directly or indirectly.