Answer:
We are told that Firm A has 10 million Shares outstanding, Currently trading at $ 5/share.
They adopt Poison pill to avoid possible Hostile Acquisitions.
What then is poison pill?
Poison Pill: Poison Pill technique is used to avoid the acquisitions which may take place due to the hostile takeovers. This is a defensive mechanism used by the target company to prevent the bidders from takeover. At that time it allows the shareholders to buy more shares at a discount , if one shareholders purchase the 20% of the shares.
Here, the posison pill allows the shareholders to purchase additional share per share owned. This allows the shareholders to purchase their new shares at a price of $2/sahre if a hostile bidder purchases 20% of the equity of firm.
If a bidder buys 20% of Firm A, this allows the other share holders to buy the shares at discount which would dilute the bidders interest and increase the cost of the bid.This makes the bidder to withdraw from the decision to takeover. He has to negotiate with board inorder to revoke the plan. The Board of Directors revokes the plan by attaching option or warrant to the existing shares.
So, the Bidder may withdraw the plan to takeover due to increase in the cost of the bid due to the purchases made by the othershareholders at discount.
Explanation:
Answer:
Category Financial Statement
Asset A Balance Sheet BS
Liability L Income Statement IS
Owners' Equity OE
Revenue R
Expense E
Gain G
Loss LS
Accumulated depreciation A-BS
Long-term debt L-BS
Equipment A - BS
Loss on sale of short-term investments LS- IS
Net income G- IS
Merchandise Inventory A- BS
Other accrued liabilities L- BS
Dividends paid E- IS
Cost of goods sold E- IS
Additional paid-in capital OE- BS
Interest income R- IS
Selling Expense E-IS
<span>Prepaid expenses are eventually expected to become expenses when their future economic value expires.
A common example of prepaid expenses are insurance/insurance polices because they are something you pay for in advance even though you may not need until a time in the future. Prepaid rent is also a prepaid expense because you are paying in advance for a future month. These items until used are considered an asset to the company. </span>
They still take and use energy from the plug when they are in. Unplugging them saves money, and energy.
Answer:
It is more profitable to rent the office. Income will increase by $30,000
Explanation:
Giving the following information:
It would cost $100,000 to staff the office and $15,000 for equipment. The revenues would be $160,000.
Rent= $75,000 in revenues.
We need to calculate the most profitable decision:
Option A:
Income= 160,000 - 100,000 - 15,000= 45,000
Option B:
Rent= 75,000
It is more profitable to rent the office.