After the transaction this shareholder no longer has a controlling interest. Given these facts, to induce the shareholder to sell the block of stock Target Inc. was forced to pay an amount in excess of the current market price of the stock. Target Inc. paid the shareholder $40 per share when the market price was $30 per share. Question How should Target Inc. account for the purchase of this treasury stock? Required 1.Provide a brief written description of the proper accounting treatment, including how the extra $10 paid per share is recorded.
(c) Listing a large firm's stock is often considered to be beneficial to stockholders because the increases in liquidity and reputation probably outweigh the additional costs to the firm. (d) Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with management's performance, an outside group may ask the stockholders to vote for it in an effort to take control of the business. This action is called a tender offer. (e) The announcement of a large issue of new stock could cause the stock price to fall.
Muscarella Inc. has the following balance sheet and income statement data: Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,000 Total CA $294,000 Long-term debt 70,000 Net fixed assets 126,000 Common equity $280,000 Total Assets $420,000 Total liab. and equity $420,000 Sales $280,000 Net income $ 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current
Suppose further that if the Federal Reserve changes the discount rate by 1 percentage point, banks change their reserves by 300. To increase the money supply by 2700 the Federal Reserve should A. reduce the discount rate by 3 percentage points B. reduce the discount rate by 10 percentage points C. raise the discount rate by 3 percentage points D. raise the discount rate by 10 percentage points 6. In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because A. the country eventually will consume more and produce less B. the country eventually will
Once the competition has been eliminated then the company increases its prices and customers are often forced to buy products at such high prices because competition has been knocked off the scene (Horngren 2011) (Garg, 2011). In this instance companies may be challenged to prove their intent when this occurs. In the article, “Is predatory pricing rational?” in The Economic Times, the author explained that it may be difficult to prove if a company is using predatory pricing to get rid of competition. The author explained using three reasons. First, it must be determined if a company is pricing their products at below variable cost.
What is more, a company may choose to pay dividend as the consideration for their investment, because high dividend payout is important for investors as dividends provide certainty about the company's financial well-being. Dividends are also attractive for investors looking to secure current income. In addition, some analysts indicate that how the decrease and increase of a dividend distributions from Champion can affect the price of its security. Companies like Champion that have a long-standing history of stable dividend payouts would be negatively affected by lowering or omitting dividend distributions. So it would be positively affected by increasing dividend payouts or making additional payouts of the same dividends.
1. From your understanding of the Sarbanes-Oxley Act, explain how you feel it may negatively affect America’s stock exchanges. The higher than expected costs for many public companies caused some companies to abandon their public status. The costs of SOX compliance negatively affect companies, markets, investors, and economic growth. Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly.
This would explain the difference in gross profit and sales revenue. 2. The economy seems to be a concern as; people are not flocking to the best of the best any longer and may be searching for alternative products. In tough times even a strong market share can erode with the search for comparable products at a lessor price. It appears that this very issue may be vexing Elite.
“Conspiracy of fools” book report 1. Discuss how the top leadership, specifically Ken Lay, Jeff Skilling, and Andy Fastow, contributed to the collapse of Enron. The executive leadership was the main cause for Enron’s collapse. Their dishonesty, greedy and selfishness made them do things that changed Corporate America forever. Kay Lay was the CEO for many years.
U.S. Semiconductor Case This case is concerning about the strategies of funding for a semiconductor company’s distribution center and technical support facility in U.K. They decided to fund with debt with dollars or pounds, but the company is facing the exchange risk due to the different locations of the parentcompany and subsidiary. The company in U.K. has to import goods from America and then sell them in U.K. so the appreciation of dollar and depreciation of pound may cause adverse effect on the company’s profit. According to the analysts’ conclusion, there are two financing alternatives, take a five-year loan in U.S. dollars at 8% per annum or in pound sterling at 12% per annum with a rest of fund comes from equity. The difficulty of choice between these two choices is that the differences between interest rates and foreign exchange rates which lead to the cost and risk to the firm.