Answer:
$20.60
Explanation:
Required Return of Stock = Risk free Rate + Beta*(Expected Return of market - Risk free Rate)
Required Return of Stock = 16.5% (4% + 1.25*(14% - 4%)), Expected Dividend in upcoming year(D1) = $2, Expected Price 1 years from now(P1) = $22
Intrinsic value of Confusion's stock today (P0):
P0 = (D1 + P) / (1 + Ke)^1
P0 = (2 + 22) (1 + 0.165)^1
P0 = 24 / 1.165
P0 = 20.60086
P0 = $20.60
Answer:
16 points
Explanation:
Customer sold stock short for $82 per share
Then, customer sold Sept 70 at $4
If short put is then exercised, the customer is obligated to buy the shares back at $70.
Net cost of the customer is $66 per share for the stock, therefore
Customer gains = 82 sale proceeds - 66 cost basis = 16 points.
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True maybe because you still need to be financially smart
Answer:
Presentation of a Multiple-step Income Statement
1. Sale of marketable securities at a loss.
In the non-operating section of the income statement
2. Adjusting entry to create (or increase) the allowance for doubtful accounts.
In the operating section of the income statement
3. Entry to write off an uncollectible account against the allowance.
In the operating section of the income statement
4. Adjusting entry to increase the balance in the marketable securities account to a higher market value.
In other comprehensive income section of the income statement
Explanation:
The sale of marketable securities at a loss gives rise to a realized loss. This is recorded in the non-operating section of the income statement after the operating section. Items 2 and 3 are recorded in the operating section of the income statement, as they relate to the entity's normal operations. Item 4 refers to an unrealized gain. This is recorded in the other comprehensive income section just as unrealized losses. The other comprehensive income section shows the comprehensive income and expenses, which refer to changes in equity that originate from non-operating sources.