Answer:
The correct answer is A
Explanation:
A substantial understatement may occur when tax return is understated by an amount greater than 10% of the tax required to be shown on the tax return.
Example: If a tax payer that is suppose to report a $6000 tax due and choose to report a $2000 instead, to know if a penalty will be charged or not it has to be greater than 10% of the amount which is suppose to be reported (i.e $6000 x 10% = 600) . therefore in the case shown above the penalty will be applied
<span>Mid-level managers oversee the activities of first-line managers. Mid-level managers are responsible for their department and report to top management. Mid-level managers must make sure that resources are allocated correctly and must invest money in training and development, materials, supplies and technology. They communicate the goals and strategies to first-line managers.</span>
Answer:
a. $880.74
b. 13 years
Explanation:
a. Conversion ratio = Current Value of bond / Conversion price = 1,000 / 93.4 = 10.71
Conversion price of bond = 10.71 × 28.60 = $306.31
Coupon = Par value of bond * Coupon rate = $1,000 * 6.4% = $64
Present value of straight debt is calculated below:
Present Value = $64 × [1-(1+7.4%)^-30 / 7.4%] + [$1,000 / (1+7.4%)^30]
= $64*11.93 + $117.46
= $763.28 + $117.46
= $880.74
.
Therefore, the minimum value of bond is $880.74
b. Conversion ratio = 10.71
Current stock price = $28.6
Suppose number of year the stock will take to reach above $1,140 is t.
Conversion value = Current stock price * Conversion ratio*(1+10.8%)^t
$1,140 = $28.6 * 10.71 * (1.108)^t
(1.108)^t = 3.7218
t = 12.8145 year.
t = 13 years
