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JulsSmile [24]
3 years ago
5

is trading at 54.33. You decide to short sell 100 shares of their stock, providing 3100 in collateral to your broker. You hold t

he short position for one year and expect Comcast to pay a dividend of 1 per share. In one year, the stock price is 44. Assuming the brokerage account pays no interest on your cash, what is your return, relative to your collateral
Business
1 answer:
Usimov [2.4K]3 years ago
6 0

Answer: 30.1%

Explanation:

Return = (Value of stock when shorted - Dividend - Value of stock when returning stock)/Capital employed

Dividend = 100 shares * $1 per share

= $100

Dividends are subtracted because they are owed to the shareholders the stock was borrowed from.

Value of stock when shorted = 54.33 * 100 = $5,433

Value of stock when returning stock = 44 * 100 = $4,400

= (5,433 - 100 - 4,400) / 3,100

= 30.1%

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Following are selected transactions Danica Company for 2014:
Mamont248 [21]

Answer:

Explanation:

Answer:

On Dec 31, 2012 Lee's liability would be $9,500 (principal amount) and $38 (accrued interest)

Explanation:

Lees notes:

Dec. 13 Accepted a $9,500, 45-day, 8% note dated December 13 in granting Miranda Lee a time extension on her past-due account receivable.

First interest due = $9,500 x 8% x 45/360 = $95

On the 31st 18 days would have accrued of the 45days = 18/45 x $95 = $38

On Dec 31, 2012 Lee's liability would be $9,500 (principal amount) and $38 (accrued interest)

Debit Miranda Lee with $9,538

Credit interest on Receivables $38

Credit Account receivables account with $9,500

When the full interest became due we will pass an additional entry:

Dr. Lee with $58

Cr. Interest on receivables with $58

(Being the balance interest on receivables due )

On Jan 27 when Lee paid her interest and principal amount, we will:

Debit Account receivables with $9,500

Debit interest on receivables Account with $95

Credit Tomas account with $9,595

( being liquidation of Lee's indebtedness)

Tomas notes:

Mar 3, Accepted a $5,000, 10%, 90-day note dated March 3 in granting a time extension on the past-due account receivable of Tomas Company.

Let's recognize the full interest due first:

$5,000 x 10% x 90/360 = $125

At this time we will:

Debit Tomas with $5,125

Credit interest on receivables with $125

Credit Account Receivables account with $5,000

On June 1 when Tomas paid his interest and principal amount, we will:

Debit Accounts receivable with $5,000

Debit interest on receivables with $125

Credit Tomas account with $5,125

( being liquidation of Tomas indebtedness)

Hiroshi Cheng notes:

Accepted a $2,000, 30-day, 9% note dated March 17 in granting Hiroshi Cheng a time extension on his past-due account receivable.

Interest = $2,000 x 9% x 30/360 = $15

The entries recognizing this liability will be to :

Debit Cheng Account with $2,015

Credit interest on receivables with $15

Credit Accounts receivable with $2,000

(Being receivables payable balance and interest on balance owed by Cheng)

However Cheng failed in paying up. It was decided to write off the debt.

The entries would be:

Dr. Accounts receivables $2,000

Dr. Interest on Accounts receivables with $15

Cr. Cheng's Account with $2,015

(Being debt owed by Cheng written off)

8 0
3 years ago
The Lin household’s annual income is $188000. Based on the U.S. federal tax rates below, what is the average tax rate for the Li
Sedaia [141]

Answer:

24%

Explanation:

For the taxes due on April 2020 (current year taxes):

The Lin household falls under the fourth tax bracket for married individuals filing jointly:

  • tax rate 24%
  • Income between $171,051 to $326,600

If no deductions were available, they would owe $188,000 x 24% = $45,120 in taxes.

6 0
3 years ago
Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 75.00. During these years of part
ser-zykov [4K]

Answer:

Annual deposit= 13,346.55

Explanation:

Giving the following information:

Exactly one year after the day he turns 75.0 when he fully retires, he will begin to make annual withdrawals of $129,100.00 from his retirement account until he turns 94.00. After this final withdrawal, he wants $1.85 million remaining in his account.

He will make contributions to his retirement account from his 26th birthday to his 65th birthday.

Assume an 8.00% interest rate.

First, we need to calculate the amount of money needed at 65.

39 years*129,100 + 1,850,000= $6,884,900

We need to calculate the value at 65:

PV= 6,884,900/(1.08^10)= $3,189,040.85

We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (3,189,040.85*0.08)/[(1.08^39)-1]= $13,346.55

8 0
3 years ago
Tanner, Inc. incurred a financial and taxable loss for 2018. Tanner therefore decided to use the carryback provisions as it had
inessss [21]

Answer:

The refund claimed should be shown as a benefit due to loss carryback in 2018.

Explanation:

Since Tanner, Inc. incurred a financial and taxable loss for 2018. and decided to use the carryback provisions as it had been profitable up to this year, the amounts related to the carryback should be reported in the 2018 financial statements as a benefit due.

Tax loss carryback is when a corporation <u>retrospectively adjusts its tax returns for prior periods</u> if it incurs a net operating loss (NOL) in current period.

The loss carryback <u>generates a tax refund</u> for the business because it reduces previous year tax liability. After the carried back loss is applied, it will be <u>as though the business overpaid taxes the previous year; which will now be shown as a benefit in the current year</u>

4 0
3 years ago
What is the difference between an employee and an entrepreneur?
sasho [114]

Answer:

Employees fall under a particular job category. Entrepreneurs create their own profile. Employees have to perform tasks according their respective job profiles. Irrespective of their interest, they are forced to work in an alien environment.

3 0
3 years ago
Read 2 more answers
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