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kenny6666 [7]
3 years ago
7

The decision to issue additional shares of stock is an example of: Multiple Choice working capital management. a controller's du

ties. a net working capital decision. a capital structure decision. capital budgeting.
Business
1 answer:
nataly862011 [7]3 years ago
5 0

Answer:

A capital structure decision

Explanation:

Capital Structure decision can be regarded as all the arranging capitals that is been accumulated from various sources, so that the need of long-term funds can be met for the business. Capital Structure decision have a great impact on return of an equity owners as well as the risk. It should be noted that The decision to issue additional shares of stock is an example capital structure decision.

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Fontaine Inc. recently reported net income of $2 million. It has 500,000 shares of common stock, which currently trades at $40 a
Firlakuza [10]

Answer:

$50

Explanation:

Given,

Current Net income = $2,000,000

No. of common shares today = 500,000

Current market price per share = $40

Anticipated Net income in 1 year = $ 3,250,000

Anticipated No. of common shares in 1 year = 500,000 +150000 =650,000

From this data, then

The current Earnings Per Share(EPS) = \frac{2,000,000}{500,000} = 4

Current Price/Earning ratio = \frac{ Price per share}{EPS} = \frac{40}{4} = 10

Anticipated EPS in 1 year=\frac{Anticipated Net income in 1 year }{Anticipated No. of common shares in 1 year } = \frac{3,250,000}{650,000} = $5

If the company's P/E ratio remain as that of the current at 10, then

The anticipated price of stock in 1 year = Anticipated EPS * P/E ratio in 1 year

 = $5 *10 = $50

4 0
3 years ago
Carol and Dave each purchase 100 shares of stock of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Caro
tino4ka555 [31]

Answer:

See below

Explanation:

From the above information, we can deduce that the stock owned by Carol and Dave falls in value by $2,000 I.e ($10,000 - $8,000) ; it is to be noted that Carol solely has realised and recognized loss of $2,000.

Here, one of the cogent factors that determines whether a sale has taken place is if realization has been effected. Here, stock sold by Carol qualifies as a disposition while the decline in the value of stock sold by Dave does not qualify as disposition.

With regards to the foregoing, we can conclude that the federal income tax law treat the decline in the value of the stock differently for Carol and Dave.

8 0
3 years ago
Bill and Mike go in together to purchase 342 acres of land to use for hunting and family vacations. Ten years later, Bill dies a
romanna [79]

Answer:

Joint Tenancy

Explanation:

Joint tenancy represents a legal contractual arrangement that involves two or more people who have agreed to own a single property sharing both obligations and rights equally.

The terms of join tenancy is such that no one whether the partner or an inheritor of will is able to sell the property in future without the consent of other partners. Secondly, when a partner dies joint tenancy does not transfer assets to heirs instead it is vested in the surviving partner.

It becomes that Bill did not name his wife as his beneficiary, hence Mike inherits the entire 342 acres of land after Bill's death.

4 0
3 years ago
Is this bond currently trading at a​ discount, at​ par, or at a​ premium? Explain. ​(Select the best choice​ below.) A. Because
Dmitrij [34]

A. Because the yield to maturity is less than the coupon​ rate, the bond is trading at a discount. FALSE

<u>Explanation:</u> If the yield to maturity (YTM) is less than the Coupon rate (CR) the bond is trading at a premium

B. Because the yield to maturity is greater than the coupon​ rate, the bond is trading at par. FALSE

<u>Explanation:</u> If the yield to maturity (YTM) is greater than the Coupon rate (CR) the bond is trading at a discount.

C. Because the yield to maturity is less than the coupon​ rate, the bond is trading at a premium. TRUE

D. Because the yield to maturity is greater than the coupon​ rate, the bond is trading at a premium. TRUE

7 0
3 years ago
A company purchased land for $82,000 cash. Commissions of $8,000, property taxes of $8,500, and title insurance of $2,200 were a
AleksAgata [21]

Answer:

the amount that company should record the land is $97,600

Explanation:

The computation of the amount that company should record the land is shown below:

The Amount should be recorded for land is

= Purchase price + Commission + Property tax paid on behalf of seller + Title insurance

= $82,000 + $8,000 + $5,400 + $2,200

= $97,600

hence, the amount that company should record the land is $97,600

7 0
3 years ago
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