In order to calm down irate members and hopefully resolving it to everyone’s satisfaction is to remain calm, apologize and probe for details, use the best listening skills, actively sympathize, diagnose the entire, find a solution and devise an action plan.
Options:
- Smith Bus should be excused from performance under the clause for the rights on improper delivery
- Smith Bus should not be excused from performance because it did not act in good faith
- Smith Bus should be excused from performance under the test of commercial impracticability
- Smith Bus can exercise its right of anticipatory repudiation
Answer:
Correct answer is Option c.
<u>Smith Bus should be excused from performance under the test of commercial impracticability
</u>
Explanation:
In this case, Smith cannot fulfil the contract obligation due to an unforeseen event. Hence, Commercial impracticability shall apply.
Answer:
a. Are the stock and the rights correctly priced on the ex-rights day?
stock price at ex-right = [(3 x $80) + $53] / 4 = $73.25
cost of ex-right = $80 - $73.25 = $6.75
the rights are underpriced since they are sold at $2, and they should sell at $6.75
b. Describe a transaction in which you could use these prices to create an immediate profit.
You can purchase 3 rights at $6 and then pay subscription price ($53) and you would have an stock at $59. Your profit = $65 - $59 = $6 per stock.
Answer:
Risk: The bonds you own will decline if interest rates rise, interest rate risk.
Minimalize:
- Don't buy bonds when interest rates are low or rising. Buy when stable.
- Stick to short term issues (3 - 5 years)
- Buy bond with different maturity dates
Explanation:
Good luck <3
Answer: $109,080; $145,920
Explanation:
Based on the information that have been provided in the question, the following can be gotten:
The amount for income tax expenses will be:
= 36% of $303,000
= 36/100 × $303,000
= 0.36 × $303,000
= $109,080
The net income will be:
Reported income = $303,000
Less income tax = $109,080
Less loss on discounted operation = $48,000
Net income = $145,920
Loss on discounted operation:
= $75,000 × (1 - 36%)
= $75,000 × (1 - 0.36)
= $75,000 × 0.64
= $48,000