Answer:
(a) Common shares outstanding after stock split:
= 1,000,000
(b) New par value per share = 0.01 × 20
= 0.2
(c) Since, there will be no change in the paid up capital after the reverse stock split. So, there is no need to record journal entry, as it will be accounted as the memorandum.
Answer: When a market price allocates resources, everyone who is able to pay the price gets the resource.
Explanation:
The market allocates prices to goods and services based on the scarcity of the said goods and services. This means that regardless of how scarce a good is, you can get it if you are willing to pay the price that it is being offered at.
For instance, if the price of tomatoes suddenly went up from $4 to $12 per pack, it means that tomatoes are now more scarce and not many people can afford it. If you can afford that $12 however, you will be able to get the tomatoes despite how scarce it is.
Answer:
Option (D) 1.29%
Explanation:
Data provided in the question:
Treasury bill returns over four years :
4%, 3%, 2%, and 5%
Now,
Average return = (4% + 3% + 2%+ 5%) ÷ 4
= 3.5%
Standard deviation = [ ∑(Return - Mean)² ] ÷ [ n -1 ]
= [ (4% - 3.5%)² + (3% - 3.5%)² + (2% - 3.5%)² + (5% - 3.5%)² ] ÷ [ 4 - 1 ]
= 3.87% ÷ 3
= 1.29%
Hence,
Option (D) 1.29%
Answer:
a.
The current ratio is 2.7
b.
The acid-test ratio is 1.7
Explanation:
a)
The current ratio is a ratio to measure the liquidity of a firm. The current ratio calculates the amount of current assets per every $1 of current liability.
Current ratio = Current assets / Current Liabilities
Current ratio = (15000 + 5000 + 8000 + 20000 + 6000) / 20000
Current ratio = 2.7 or 2.7 : 1
b)
The acid test ratio is also a measure of liquidity that only takes into account the most liquid asset in calculation of the ratio and it excludes the inventory in the calculation.
Acid test ratio = (Current assets - Inventory) / Current liabilities
Acid test ratio = (15000 + 5000 + 8000 + 6000) / 20000
Acid test ratio = 1.7 or 1.7 : 1
Answer:
$4.50
Explanation:
In order to make a profit from the futures contracts, it would be appropriate to take a long position in the June futures contract(buy) and take a short position in the December futures contract.
The investor would borrow $60 today which would necessitate paying back $60 plus a half-year in interest payment.
loan repayment=$60*(1+5%/2)=$ 61.50
In December, sell crude oil at $66 and repay the loan principal and interest
profit=$66-$61.50=$4.50
