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.
If this project would cannibalize other projects by $1 million of cash flow before taxes per year. How would this change your answer to part a? c. Ignore part b. if the TR dropped to 30%, how would that change your answer to part a? a. [pic] b. b.
(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.
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
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.
a) Prepare a cash budget for Sharpe covering the first seven months of 2004. b) Sharpe has $220,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes? No, the firm will not have enough cash to pay the notes payable. Although there is enough ending cash if $200,000 is spent on the notes payable then there will be an insufficient amount to purchase raw materials or other expenditures. If the firm decides to use its cash for the notes payable it will then have to obtain financing to maintain the cash balance.
2) Suppose the selling price of outsiders drops another $15 to $185. Should P purchase from outsiders? 3) Suppose (disregarding Requirement 2) that S could modify the component at an additional variable cost of $10 per unit and sell the 2,000 units to other customers for $225. Would the entire company then benefit if P purchased the 2,000 components from outsiders at $200 per unit? 4) Suppose the internal facilities could be assigned to other production operations that would otherwise require additional annual outlays of $29,000.
This is almost a guaranteed way to lose customers. 5. I would suggest that GLC carefully consider every pro and con of the possible operation. Being able to transport products to the manufacturer in a larger quantity would be great, but does the possibility of losing customers or perhaps not being able to have the project funded by investments put the company in an economic decline be worth
"It all depends on the assumptions." To see just how good some of the new metrics are at valuing acquisitions, we asked both Stern Stewart and HOLT Value Associates LP to calculate a fair value for Snapple at the time of its acquisition by Quaker, using only data that was publicly available at that time. Stern Stewart declined, citing its former consulting relationship with Quaker, but HOLT agreed to take on the assignment using its CFROI (cash flow return on investment) methodology. First, some background. In valuing a company whose CFROI is higher than average, HOLT assumes those returns will gradually fade toward the market norm because of competitive pressures.
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.