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Virty [35]
3 years ago
10

Suppose you believe that Florio Company's stock price is going to decline from its current level of $82.50 sometime during the n

ext 5 months. For $5.10 you could buy a 5-month put option giving you the right to sell 1 share at a price of $85 per share. If you bought this option for $5.10 and Florio's stock price actually dropped to $60, what would your pre-tax net profit be
Business
1 answer:
Lunna [17]3 years ago
4 0

Answer:

$19.9

Explanation:

According to the given situation the computation of pre-tax net profit is shown below:-

Net pre-tax profit = Option exercised per share  + Actual stock price at the end + Profit - Option premium

= $85 + $60 + $25 - $5.10

= $19.9

Therefore for computing the pre-tax net profit we simply applied the above formulas.

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The lower the market price,
zalisa [80]
D the lower the taxes(I searched it up)
8 0
11 months ago
Match each economic scenario with the correct economic term.
kkurt [141]

Answer:

The answer is:

1 - Underutilization

2 - Efficiency

3 - Unattainability

Explanation:

Efficiency in economics means a situation in which all resources are optimally distributed to serve each entity in the best way while minimizing waste and inefficiency.

Underutilization in economics is also a a situation in which lesser resources are being utilized than the economy is capable of utilizing.

Unattainability is a situation in which what one to accomplish or achieve is not possible.

1 - Underutilization

2 - Efficiency

3 - Unattainability

6 0
3 years ago
Plutonic Inc. had $400 million in taxable income for the current year. Plutonic also had an increase in deferred tax liabilities
Sergeu [11.5K]

Answer:

Increase of 130 million

Explanation:

In this question, we are looking to evaluate what has happened to change in deferred tax assets. We proceed as follows;

Firstly, we calculate the current tax.

Mathematically = 40% of 400 million = 40/100 * 400 million = 160 million

Now, as we can see in the question, a decrease in deferred tax asset resulted in an increase in tax expense to a tune of $50 million

This brings the total tax expense to 160 million + 50 million = 210 million

We can see from the question that the company has only recognized a tax expense of $80 million.

This means that the change in deferred tax asset was an increase of 210 million- 80 million = $130 million

8 0
3 years ago
An investor purchases a 15-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of in
ra1l [238]

Answer:

Bond Price​= $846.3

Explanation:

Giving the following information:

YTM= 0.05

Maturity= 15*2= 30 semesters

Par value= $1,000

Coupon= $40

<u>To calculate the price of the bond, we need to use the following formula:</u>

<u></u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 40*{[1 - (1.05^-30)] / 0.05} + [1,000 / (1.05^30)]

Bond Price​= 614.90 + 231.38

Bond Price​= $846.3

6 0
3 years ago
Ifre chapter 1, conceptual multiple
geniusboy [140]

Answer:

Explanation:

When the future revenue producing ability of the inventory is above its original cost the

companies should reports their inventory value with LCNV method.

5 0
2 years ago
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