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7nadin3 [17]
3 years ago
10

When we purchase a few shares of another corporation, what is the effect on your stockholders' equity

Business
1 answer:
matrenka [14]3 years ago
5 0

Group of answer choices.

A. Increase.

B. Cannot tell from the given information.

C. No effect.

D. Decrease.

Answer:

C. No effect.

Explanation:

A corporation can be defined as a corporate organization that has facilities and owns or controls assets used for the production of goods and services in at least one country other than its headquarter (home office) located in its home country.

This ultimately implies that, a corporation is a corporate organization that owns or controls its business in two or more countries.

One of the advantage of a corporation is that, owners have limited liability for debt to the extent to which they have invested and as such are not personally liable for some of debt owed by corporation.

Generally, a corporation is considered to be perpetual in nature and it is a body that comprises of a group of people such as directors, shareholders etc., who act as a single entity. Also, corporations can be sold through stocks or shares, as a public entity.

Stockholders' equity can be defined as the amount of assets remaining or the residual interest of assets in a business after all liabilities are settled or deducted. A stockholders' equity is calculated by deducting or subtracting the value of liabilities from the value of assets on the balance sheet of a company.

Hence, when we purchase a few shares of another corporation, it has no significant effect on your stockholders' equity.

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8 0
2 years ago
a budget that is prepared at the beginning of the period for a specific level of activity is called a ______ budget.
galina1969 [7]

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4 0
3 years ago
An investor wants to purchase an annuity that will pay her £80,000 per year for the next 10 years. If the constant, annual effec
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Answer:

£718,607

Explanation:

Annuities are investment opportunities that require an initial settlement  and gives  a series of returns of a fixed amount for a specific number of periods.

In simple terms, the question requires us to calculate the amount to be paid today (Present Value) of an annuity that pays £80,000 per year for the next 10 years.

To establish the [Present Value of the Annuity, the future Cash Flows must be discounted to the Present Value using the appropriate discount rate. In our case, we will use the annual effective interest rate of 2%.

Present Value = PMT × [ 1 - 1/(1+r)^n ÷ r ]

Where,

PMT = £80,000

n = 10

r = 2%

Therefore,

Present Value = £80,000 × [ 1 - 1 / (1.02) ^ 10 ÷ 0.02]

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