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baherus [9]
3 years ago
11

Which one of the following statements about book value per share is most correct? Market price per common share usually approxim

ates book value per common share. Book value per common share is based on past transactions whereas the market price of a share of stock mainly reflects what investors expect to happen in the future. A market price per common share that is greater than book value per common share is an indication of an overvalued stock. Book value per common share is the amount that would be paid to stockholders if the company were sold to another company.
Business
1 answer:
Rom4ik [11]3 years ago
4 0

Answer:

Book value per common share is the amount that would be paid to stockholders if the company was sold to another company.

Explanation:

Book value per common share is a process by which the per-share value of the company is calculated. The calculation is done based on the common equity of the shareholders of the company. In case when the company dissolves, the book value per common share helps in the calculation of the value of the assets left for the shareholders after the payment of the debtors and after the liquidation of the assets.

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6 0
3 years ago
The Geostar Company, leading manufacturer of wireless communication devices, is considering three cost-reduction proposals in ts
S_A_V [24]

Answer: Alternative 3 will be selected.

Explanation:

The system that should be selected is the alternative that is better than the other alternatives by being higher than MARR if selected.

First compare A1 to A0

The rate of return here is 18% which is higher than the MARR of 15% so Alternative 1 should be chosen over A0 which is to do nothing.

Compare A1 to A2

If A2 is chosen over A1, the incremental return is 10% which is less than the MARR of 15% so A2 should not be chosen over A1. A1 should instead be chosen over A2.

Compare A1 to A3

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Alternative 3 should be chosen over A1 which should be chosen over A2 and A0.

A3 will therefore be selected.

7 0
3 years ago
During the past 1000 years, the income per person of the world has
Mamont248 [21]

Answer: Has increased.

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5 0
3 years ago
Banks make a profit by
Neporo4naja [7]
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7 0
3 years ago
Read 2 more answers
Harper, Inc., acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2020, for $347,200 in cash. Th
Goshia [24]

Answer:

Kinman Company    272,000  debit

Royalties Kinman Co 54,000  debit

Building Kinman Co   21,200  debit

  Cash                             347,200  credit

--to record the purchase--

sales revenue 9,960 debit

        account receivables 9,960 credit

inventory                 6,972 debit

   cost of goods sold   6,972 credit

--to record the unsold part of the inventory in Kinman--

Cash       6,000 debit

Kinman Company   6,000 credit

-- to record dividends--

loss on investment 18,240 debit

retained earnings    9,680 debit

       Kinman Company 27,920 credit

--to record net loss of Kinman--

Explanation:

60% of Kinman Company:

680,000 x 40% = 272,000

Excess in Market value of building:

117,800 - 64,800 = 53,000

53,000 x 40% = 21,200

Royalty agreement market value: 135,000

135,000 x 40% = 54,000

Total Value:

272,000 + 21,200 + 54,000 = 347,200

now, we must "unrecord" the unsold part of the inventory of Kinman as it is now considered a intra-entity transaction.

<u><em>Sales Revenue:</em></u>

24,900 x 40% =  9,960

<em><u>Cost of Good Sold:</u></em>

77,700 x 24,900/111,000 x 40% = 6,972

Dividends: they are not considered gain but a distribution of cash from Kinman to us.

15,000 x 40% = 6,000

Losses impact the equity thus, decrease the Kinman Company account

45,600 + 24,200 = 69,800

69,800 x 40% = 27,920

The comprehensive loss will directly decrease retained earnigns rather a loss directly.

45,600 x 40% = 18,240

24,200 x 40% =  9,680

The rest of the transactions occurs in 2021 and we are only asked for 2019/2020

4 0
3 years ago
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