Answer:
At face value
Explanation:
Short term notes are always recorded at face value, and that applies to both interest and non-interest bearing short term notes.
Non-interest bearing long term notes must be recorded at their discounted value, i.e. you must discount the long term note' face value by the discount rate used by the company.
A. True
Btw that's a picture of me.
Answer: 9.09% ownership
Explanation:
Your current ownership of the shares in Webster Mills is 10% of 3 million.
That means that you own,
= 10% * 3 million
= 300,000 shares.
The new offering that the company is doing equates one right to each share of existing stock and is expected to raise $12 million in new financing at a cost of $40. The goal is to find out how many new shares this will add.
= 12,000,000/40
= 300,000 shares
This means that 300,000 new shares will be added.
There are already 3,000,000 shares outstanding and now there are 300,00 extra which would bring the total to,
= 3,000,000 + 300,000
= 3,300,000 outstanding shares.
Since you sold your rights then you still have shares but now your percentage of ownership will change because of the increase in outstanding shares.
Your ownership percentage is now,
= 300,000 shares (that you own) / 3,300,000 (new outstanding balance)
= 0.0909
= 9.09%
Your new ownership position is that you own 9.09% of Webster Mills.
