Ask question

Ask question

All categories

3 years ago

10

An investor purchases a PQR convertible bond at 98 on June 18, 1994. The bond is convertible at $25, and on June 19, 1995, when

the common stock is trading at $26 per share, the investor converts his bond into the stock. For tax purposes, these transactions will result in

1 answer:

suter [353]3 years ago

8 0

Answer:

pqqrptqtrmxyqumqmrmqmqmymh m

You might be interested in

Full abbreviation of C. D. O

Vera_Pavlovna [14]

The full form is collateralized debt obligation

7 0

3 years ago

Read 2 more answers

Static and flexible budgets are similar in that: Multiple Choice

KengaRu [80]

Answer:

The correct answer is letter "B": They both are based on the same per unit variable amounts and the same fixed costs.

Explanation:

Static budgets are estimates that use the same fixed cost amounts, while flexible budgets change the number of fixed costs at different levels of production. However, both of them use the same per unit variable amounts as well as the same fixed costs in the manufacturing process.

7 0

4 years ago

Ultra Big Corporation, Inc. is preparing its annual report for shareholders. The statement of cash flows, which is included in t

chubhunter [2.5K]

Answer:

Cashflow from financing activitues

Explanation: A company's statement of cashflow refers to a concise and segmented financial statement broken into three parts namely the operations, financing and investing activities showing changes in the account and cash inflow and outflow from the company's dealings. The scenario stated stated above would be recorded under the cashflow from financing activities as it is that part of the cashflow statement which shows net cashflow utilized in funding activities. This section contains financial cashflow on income from Issuance of debt or bond, stock repurchase and payment of Dividend which are all highlighted in the scenario above.

4 0

3 years ago

Jim has a house payment of $2,000 per month of which $1,700 is deductible interest and real estate taxes with the remaining $300

Vaselesa [24]

Answer:

$1,490

Explanation:

Interest expense is tax deductible in the computation of after tax cost. Therefore, Jim will enjoy tax-induced saving on the $1,700 interest portion of his monthly house payment.

Tax saving on the interest payment is computed as follows:

$1,700 * 30% tax rate = $510.

Therefore, after-tax cost of Jim's house payment

= total monthly payment, less tax saving on interest

= $2,000 - $510

= $1,490.

4 0

4 years ago

Ginny is considering an investment costing $55,000 that has cash flows of $35,000 in Year 2, $36,000 in Year 3, and −$5,000 in Y

denis-greek [22]

Answer:

Cumulative cash flows in year 0 = -$55,000

Cumulative cash flows in year 1 = -$55,000

Cumulative cash flows in year 2 = -$55,000 + $35,000 = -$20,000

Cumulative cash flows in year 3 = -$55,000 + 35,000 + $36,000 = $16,000

So, Payback period of three years =2+20000/36000 = 2.5555556 years

Now, as the payback period is less than three years, we should make the investment

However, I do not agree with the decision as payback method does not consider time value of money and ignores all cash flows beyond payback period and hence in this case it is ignoring cash flows in year 4 which is an outflow

NPV=-55000+0/1.08^1+35000/1.08^2+36000/1.08^3-5000/1.08^4=-90.3298767 As NPV is negative, let do not make the investment.

7 0

3 years ago