In total it will be $74,295; since the investors paid $80,000 the yield rate is less than 8%. As for the correctness of the $748 first year bond discount amortization, the calculation follows: Since the bond proceeds were $80,000 and the true yield is 7.23% per year. 7.23% came from the interest table that I have. Then for Year 1 net interest should be $80,000*.0723 =$5784. But the stated interest payment is $5,000, thus the $784 interest expense is amortization of the bond discount.
15. Question: : (TCO D) On January 1, Martinez Inc. issued $3,000,000, 11% bonds for $3,195,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium.
Question 23 Which of the following statements is CORRECT? Question 24 Which of the following bonds has the greatest interest rate price risk? Question 25 A 10-year bond pays an annual coupon, its YTM is 8%, and it currently trades at a premium. Which of the following statements is CORRECT? Question 26 Assume that interest rates on 20-year Treasury and corporate bonds with different ratings, all of which are noncallable, are as
Investors buy stock at the C. quoted ask price. 3. Which of the following statements is most correct? A. The stock valuation model, P0 = D1/ (i - g), can be used for firms which have negative growth rates.
The bonds are dated January 1, 2012, and mature January 1, 2017. Interest is payable annually on January 1. Instructions Set up a schedule of interest expense and discount amortization under the effective-interest method. (Hint: The effective-interest rate must be computed.) Discount = 3,000,000 – 2,783,724 = 216,276 Effective interest rate = 300000/2,783,724 =approx.
In which financial statement did you find this information? What are the components of this financial statement? $162,894,783 . Cash flow statement. Cash transactions from op, fin and inv o Were any stock options exercised?
years. | | The step-by-step calculation is: P | = | S(1 + rt)-1 | | | = | 400,000(1 + 0.0892 x 0.24657534...)-1 | | | = | 400,000 x 0.97847883... | | | = | $391,391.53 | Rounded as last step | b)You are correct. When the first bill matures at time 90 days, the investor purchases a second bill. We must find the purchase price of the second bill. This can be displayed on a time line: | | | | | $P | $400,000 | | | | | | 0 | 90 | 180 | 270 | | | | | | | | | P | = | price | = | unknown | | S | = | Maturity value | = | $400,000 | | r | = | Simple interest rate (decimal) | = | 9.16 | 100 | | = | 0.0916 | | t | = | Time period (years) | = | 90 | 365 | | = | 0.24657534... years.
depreciation over 3 years Depreciation costs per year: 24/3= 8 mln per year. Q3. Tax rate in 2012 = Income Tax Expense / Income Before Tax = 1127mln/4914 mln = 22,93% Q4. | Year 0 | Year 1 | Year 2 | Year 3 | | | | | | | | R&D expenses | -77 | | | | | | | | | | | Total Revenues | | 110 | 83 | 55 | All in millions | Cost of Goods Sold | | -8 | -8 | -5 | | Gross Profit | | 102 | 75 | 50 | | depreciation | | -8 | -8 | -8 | | Adm/sales/etc | | -3 | -3 | -2 | | EBIT | -77 | 91 | 64 | 40 | | Unl Net income | -59,34 | 70,13 | 49,32 | 30,83 | | Q5.
BRIEF EXERCISE 19-8 Income before income taxes $195,000 Income tax expense Current $48,000 Deferred 30,000 78,000 Net income $117,000 BRIEF EXERCISE 19-10 Year | Future taxable amount | X | Tax Rate | = | Deferred tax liability | 2013 | $ 42,000 | 34% | $ 14,280 | 2014 | 244,000 | 34% | 82,960 | 2015 | 294,000 | 40% | 117,600 | | | | $214,840 | BRIEF EXERCISE 19-14 Income Tax Refund Receivable ($350,000 X. 40) 140,000 Benefit Due to Loss Carryback 140,000 Deferred Tax Asset ($500,000 – $350,000) X .40 60,000 Benefit Due to Loss Carryforward 60,000 Benefit Due to Loss Carryforward 60,000 Allowance to Reduce Deferred
1. Analysis of stockholders' equity Star Corporation issued both common and preferred stock during 20X6. The stockholders' equity sections of the company's balance sheets at the end of 20X6 and 20X5 follow: 20X6 20X5 Preferred stock, $100 par value, 10% $580,000 $500,000 Common stock, $10 par value 2,350,000 1,750,000 Paid-in capital in excess of par value Preferred 24,000 — Common 4,620,000 3,600,000 Retained earnings 8,470,000 6,920,000 Total stockholders' equity $16,044,000 $12,770,000 a. Compute the number of preferred shares that were issued during 20X6. b. Calculate the average issue price of the common stock sold in 20X6.