Answer:
$9.40
Explanation:
First we have to calculate the future value of the stock when it starts to pay the $1.40 using the perpetuity formula:
stock price in 7 years = $1.40 / 10.7% = $13.08
Now we have to find the present value of both next year's dividend and the perpetuity:
stock price = ($3.30 / 1.107) + ($13.08 / 1.107⁷) = $2.98 + $6.42 = $9.40
Answer:
$4,300
Explanation:
Since the call expired, the $500 premium must be reported as a short term capital gain. Short term capital gains are taxed in the periods that they occur, so they do not affect the basis of the stocks. It is something similar to dividends, if you receive dividends they will be taxed as short term gains = ordinary income, bu they do not affect the stocks' basis.
Answer:
The difference is $9,450,000
Explanation:
Market Value of Share = $27.50 x 530,000
=$14,575,000
Book Value = $5,125,000.
Difference = $14,575,000- $5,125,000.
=$9,450,000
The market value is greater than book value by $9,450,000
Explanation:
Households supply labor to firms and are paid wages in return. Firms use that labor to produce pizzas and sell those pizzas to households. There is a flow of goods (pizzas) from firms to households and a flow of labor services (worker hours) from households to firms.
