Three months later, Lynn sold 3,000 of these shares at $19 per share. If the cost method is used to record treasury stock transactions, to record the sale of the 3,000 treasury shares, Lynn should credit a. Treasury Stock for $57,000. b. Treasury Stock for $30,000 and Paid-in Capital from Treasury Stock for $27,000.
$4.0 million e. If operating capital in the previous year was $24 million, what was the company’s free cash flow (FCF) for the year? $2.0 million f. What was the company’s economic value added? $500,000 2. As an institutional investor paying a marginal tax rate of 46%, your after-tax dividend yield on preferred stock with a 16% before-tax dividend yield would be: 14.9% 3. A 7% coupon bond issued by the state of New York sells for $1,000 and thus provides a 7% yield to maturity.
$20,000*20 days outstanding= AR $400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5. The company’s assets are financed with some combination of long-term debt and common equity. What is the company’s debt ratio? Equity Multiplier= 2.5 Asset/Equity = 2.5/1 1+1.5= 2.5 Debt/Asset= 1.5/2.5= .6 3-3 Market/Book Ratio Winston Washer’s stock price is $75 per share. Winston has $10 billion in total assets.
80*7.1607+1000*.3555 = $928 • 5-2 Yield to Maturity for Annual payments Wilson Wonders’s bonds have 12 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity? 100+1000-850/12/1000+850/2 = 112.5/925 = .1216 or 12.16% • 5-6 Maturity Risk Premium The real risk-free rate is 3%, and inflation is expected to be 3% for the next 2 years.
• debit to Allowance for Doubtful Accounts for $3,300. Multiple Choice Question 182 The financial statements of the Melton Manufacturing Company reports net sales of $300,000 and accounts receivable of $50,000 and $30,000 at the beginning of the year and end of year, respectively. What is the average collection period for accounts receivable in days? • 60.8 • 96.1 • 36.5 • 48.7 Find the final exam answers here ACC 291 Final Exam Answers Multiple Choice Question 119 Stine Company purchased machinery with a list price of $64,000. They were given a 10% discount by the manufacturer.
If Lee plans to establish the DL Foundation once the fund grows to $1,898,000, how many years until he can establish the foundation? Part A: Table 6-1 Part B: 6% Part C: 11N Part D: 1898000 = 1000000X 1000000 1000000 X = 1.898 Problem 5: James Kirk has just inherited some money from a long lost relative. The inheritance is set up so that James will receive $20,000 per year for the next 25 years starting
Capital Structure Policy (Trans Can Corporation): Homemade Leverage Firm’s Capital Structure: Assume net operating income of $1,000,000, no debt, and 400,000 shares outstanding valued at $20 each. The firm (like individuals) can borrow money and pay a 10% interest rate. There are no transaction costs or taxes. Currently the shareholders earn a ROI of: $1,000,000/(400,000 x $20) = 12.5% Let’s say that the firm wants to have a D/E ratio of 1.0 and has decided to incur $4,000,000 in debt at 10%. It will use this borrowed money to buy back 200,000 shares at $20 each.
Saheed Olagunju Homework Wk2 FI515 Chapter 3-1 Days Sales Outstanding Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5.
1. The price which the owner of a put option (the long position) must pay in order to sell the stock named in the option contract is called the ____B C____ A. call premium B. exercise price C. strike price D. market price 2. You purchased 1000 shares of common stock on margin for $42 per share. The initial margin is 50% and the stock pays no dividend. Your rate of return would be ___D_______ if you sell the stock at $65 per share.
Saheed Olagunju Homework Wk2 FI515 Chapter 3-1 Days Sales Outstanding Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5.