Answer:
Godfrey Corporation
GOLDFREY CORPORATION
Balance Sheet (Partial)
December 31, 2017
Noncurrent assets:
Investments:
Investment In Stock, at fair value $64,100
Stockholders' Equity:
Common stock
Retained earnings
Less :
Unrealized loss $4,900
Explanation:
a) Data and Calculations:
Long-term investment available for sale:
Cost = $69,000
Fair value 64,100
Unrealized loss $4,900
b) The correct entry would have been to reduce the net income by the unrealized loss. However, for simplicity, this is showed as a reduction of the Retained Earnings in the balance sheet.
Answer:
The annual loss expectancy (ALE) is:
= $1,500.
Explanation:
a) Data and Calculations:
Single loss expectancy (SLE) = $500
Annual rate of occurrence (ARO) = 3
Therefore, the annual loss expectancy (ALE) = SLE * ARO
= $500 * 3
= $1,500
b) The Annual Loss Expectancy is calculated by multiplying the annual rate of occurrence (ARO) by the single loss expectancy (SLE). While SLE represents the expected monetary loss every time a loss or risk occurs, and ARO is the probability that a loss or risk will occur in the year under consideration.
Answer:
B. increase the amount of pollution reduction by increasing the marginal cost and increasing the marginal benefit of pollution reduction to the utility.
Explanation:
The above is likely the answer due to the fact that, an increase of the marginal cost would likely lead to increasing the amount of pollution reduction all things being equal.
Answer:
Intrinsic value of the stock is = $10
Explanation:
<em>The value of a stock is the present value of the expected dividends discounted at the required rate of return.</em>
We can determine the intrinsic value of a stock using the steps below:
Step 1
<em>Calculate the cost of equity using the capital asset pricing model (CAPM)</em>
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 4%, Rm- 13%, β- 4
E(r) = 4%+ 4× (13- 4)%
= 40%
Step 2
<em>Calculate the value of stock</em>
Price of stock = D(1+g)/(r-g)
r- 40%, g- 10%, D(1+g)- 3 (dividend payable in year 1)
Value of stock = 3/(0.4-0.1)
= $10
Intrinsic value of the stock is = $10