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spayn [35]
3 years ago
11

A call option on MassComputer Corp. is trading with a strike price of $100 and an expiration date on November 18th at 4 pm in th

e afternoon. The premium paid on the call is $7.55. What is the net profit or loss from buying the call just prior to 4 pm on November 18 if at this time the stock price per share of MassComputer is:
Business
1 answer:
stepan [7]3 years ago
5 0

Answer:

$3.17

-$7.55

Explanation:

The calculation of stock price per share of Mass Computer is shown below:-

here, Stock price higher than strike price option will be exercised.

Net profit = Stock price - Strike price - Option premium

= $110.72 - $100 - $7.55

Net profit = $3.17

Stock price is lower than the strike price option will fail.

Net profit = Stock price - Strike price - Option premium

= 0 - $7.55

Net profit(loss) = -$7.55

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A farmer sells a bushel of corn to the supermarket for $12. The supermarket then sells the corn to customers for $25. What is th
allsm [11]

Answer:

$ 25

Explanation:

As per the description, the exact amount that is being contributed from the corn bushel to the Gross Domestic Product would be $ 25. The price at which the farmer sold it to the supermarket would not be included in the GDP because it would be considered as an intermediary good because the good purchased for the resale purpose is not included in GDP as it leads to double-counting. Thus, <u>only the price of the final good i.e. $ 25 would be included in GDP as it will now be used for final consumption by the customers</u>.

6 0
3 years ago
An economic model is useful only if it: ______________
finlep [7]

Answer:

b. contains no positive statements.

5 0
2 years ago
The most recent financial statements for Assouad, Inc., are shown here: Income Statement Balance Sheet Sales $ 11,100 Current as
Pachacha [2.7K]

Answer:

EXTERNAL FINANCING NEEDED IS $383.736

Explanation:

For calculating the external financing , we first have to take out what the sales , cost , asset , liability will be when the sales of the company increases by 17%, so now we have to calculate all the values -

   SALES    = $11,100 X 1.17  ( multiplying by 17% because of increase in sale)

                  = $12,987  

   COST = $7900 X 1.17  (multiplying by 17%)

              = $9243

INCOME BEFORE TAX = SALES - COST

                                       = $12,987 - $9243

                                       = $3744

TAXES AT 24% ON TAXABLE INCOME OF $3744

             = .24 X $3744 =$ 898.56

Now subtracting this amount from taxable income

$3744 - $898.56 = $2,845.44

Next step would be of paying dividend payout ratio from it

40% of $2,845.44 = .40 x $2845.44

= $1138.176

RETAINED EARNINGS = Taxable income - Dividend payout

                                     = $2845.44 - $1138.176

                                     = $1707.264

NOW TOTAL ASSETS WOULD BE = $15,600(5400+10200) X 1.17

                                                         = $18,252

IT IS GIVEN IN THE QUESTION THAT COST, ASSET, LIABILITY(CURRENT) ARE ALL PROPORTIONAL TO SALES.

CURRENT LIABILITY = $3300 X 1.17

                                   = $3861

TOTAL COST = LONG TERM LIABILITY + CURRENT LIABILITY

                       =$4820 + $3861

                      = $8681

TOTAL EQUITY EQUAL = $7480 + $1707.264 (RETAINED EARNINGS)

                                        = $9187.264

EXTERNAL FINANCING = ASSET - LIABILITY - EQUITY

                         = $18,252 - $8681 - $9187.264

                         =    $383.736

4 0
3 years ago
Rhonda has oversight responsibility for the servicing and repair of her company's fleet of cars, so she frequently calls the gar
dmitriy555 [2]

Answer: Variable-interval

Explanation:

3 0
2 years ago
Company's comparative balance sheet E(Click the icon to view the comparative balance sheet.) t January 31, 2019, and 2018, repor
frozen [14]

Answer:

Bosley Company

Calculation of Net Income or Net Loss during the year ended January 31, 2019, under three independent situations:

Situation 1. Bosley issued $5 million of stock and declared no dividends.  

Net Loss = stockholders' equity, January 31, 2018 plus new issue of stock less stockholders' equity, January 31, 2019

= $51 + 5 - 31 = $25 million

Situation 2. Bosley issued no stock but declared dividends of $8 million.

Net loss = stockholders' equity, January 31, 2018 less (dividends + stockholders' equity, January 31, 2019)

= $51 - (8 + 31) = $12 million

Situation 3. Bosley issued $10 million of stock and declared dividends of $50 million :

Net income = (stockholders' equity, January 31, 2019 plus dividends) minus (stockholders' equity, January 31, 2018 plus Issuance of stock)

= ($31 + 50) - ($51 + 10) = $20 million

Explanation:

a) Data and Calculations:

                                         2018    2019

Total assets                         74       48  

Total liabilities                     23       17  

Total stockholders' equity  51       31

Stockholders' equity according to the accounting equation = Assets minus Liabilities for each year.

b) Situation 1. Bosley issued $5 million of stock and declared no dividends.  

                                                                       ($' million)

Total stockholders' equity, January 31, 2018   51

Add: Issuance of stock                                       5

Net income                                                           0

Less: Dividends declared                                   0

Net loss                                                            (25 )

Total stockholders' equity, January 31, 2019   31

Net Loss = stockholders' equity, January 31, 2018 plus new issue of stock less stockholders' equity, January 31, 2019

= $51 + 5 - 31 = $25 million

c) Situation 2. Bosley issued no stock but declared dividends of $8 million.  

                                                                       ($' million)

Total stockholders' equity, January 31, 2018   51

Add: Issuance of stock                                       0

Net income                                                          0

Less: Dividends declared                                 (8 )

Net loss                                                             (12 )

Total stockholders' equity, January 31, 2019  31

Net loss = stockholders' equity, January 31, 2018 less (dividends + stockholders' equity, January 31, 2019)

= $51 - (8 + 31) = $12 million

d) Situation 3. Bosley issued $10 million of stock and declared dividends of $50 million

                                                                    ($' million)

Total stockholders' equity, January 31, 2018  51

Add: Issuance of stock                                     10

Net income                                                       20

Less: Dividends declared                               (50 )

Net loss                                                              0

Total stockholders' equity, January 31, 2019 31

Net income = (stockholders' equity, January 31, 2019 plus dividends) minus (stockholders' equity, January 31, 2018 plus Issuance of stock)

= ($31 + 50) - ($51 + 10) = $20 million

4 0
2 years ago
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