Answer:
Just impact the balance sheet
Explanation:
The amount to be recorded in the statement of cash flow relating to the disposal is the actual cash collected,at any rate,the cash received would be an additional inflow in the year,hence it is an increase in cash flow.
The impact of the above transaction would neither increase nor decrease the cash flow from operations since disposal of non-current asset is an investing activity item and no depreciation is charged in the current year
The correct option is just impact impact the balance sheet by crediting equipment account and debiting accumulated depreciation as well as debiting loss on disposal
Answer:
The answer is:
A. Find the detailed calculation in the explanation section.
B. $6.33
C. $145.59/share
Explanation:
A.
Current dividend paid is $1.21
Growth rate for the next 5 years is 16 percent.
Dividend per share in Year 1 = $1.40 per share [$1.21 x 1.16]
Dividend per share in Year 2 = $1. 62 per share [$1.40 x 1.16]
Dividend per share in Year 3 = $1.88 per share [$1.62 x 1.16]
Dividend per share in Year 4 = $2.18 per share [$1.88 x 1.16]
Dividend per share in Year 5 = $2.53 per share [$2.18 x 1.16]
B.
Earnings per share (EPS) in Year 5 = Dividend per share in year 5 / Pay-out Ratio
$2.53/0.4
=$6.33
C.
Target stock price in five years = EPS in Year 5 x Benchmark P/E Ratio
= $6.33 per share x 23times
= $145.59/share
Answer:
$269,725.58
Explanation:
The computation of the invested now amount i.e present value is shown below:
As we know that
Future value = Present value × (1 + interest rate)^number of years
where,
Future value is $350,000
Interest rate = 4.35% ÷ 12 months = 0.3625%
Number of years = 6 × 12 months = 72 months
So, the present value is
$350,000 = Present value × (1 + 0.3625%)^72
$350,000 = Present value × 1.2976151473
So, the present value is $269,725.58
Answer: b. hedge the bond positions
Explanation;
If the bond trader believes that he has too much inventory in 25-year ABC corporation bonds, it means he is worried that this holding can lead to potential loss.
The dealer would therefore like to act against this by hedging the bond positions which means to use derivative instruments such as interest rate swaps to ensure that the risk resulting from holding that many bonds is minimized.
