(TCO A) On March 1, 2010, Ruiz Corporation issued $800,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2030. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Ruiz common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2010, the fair market value of Ruiz's common stock was $40 per share and the fair market value of the warrants was $2.00. What amount should Ruiz record on March 1, 2010 as paid-in capital from stock warrants?
Question: : (TCO D) A company issues $5,000,000, 7.8/%, 20-year bonds to yield 8% on January 1, 2010. Interest is paid on December 31. The proceeds from the bonds are $4,901,036. Using effective-interest amortization, how much interest expense will be recognized in 2010? 15.
Each bond would have 75 warrants attached to it, each exercisable into one share of stock at an exercise price of $47. The firm’s straight bonds yield 10%. Each warrant is expected to have a market value of $2.00 given that the stock sells for $42. What coupon interest rate must the company set on the bonds in order to sell the bonds-with-warrants at par? Question 24 Europa Corporation is financing an ongoing construction project.
Brief Exercise 4-10 Your answer is correct. Portman Corporation has retained earnings of $720,100 at January 1, 2014. Net income during 2014 was $1,651,000, and cash dividends declared and paid during 2014 totaled $82,800. Prepare a retained earnings statement for the year ended December 31, 2014. Assume an error was discovered: land costing $87,010 (net of tax) was charged to maintenance and repairs expense in 2011.
SciTronics had a total of $ 102,000 (75,000 + 27,000) of capital at year-end 2008 and earned before interest but after taxes (EBIAT) $ 16,120 (avg. tax rate = 38%) during 2008. Its return on capital was 15.8% in 2008 which represented an increase from the 8.7% earned in 2005. 4. SciTronics had $ 75,000 of owners’ equity and earned $ 14,000 after taxes in 2008.
The net cash inflow and cash outflow are calculated using sales and production figures for the next 8 years. The unit cost from the first year is £0.89 which is the cost per mashing without depreciation and divided by 13,000 bottles. From this information provided, the cost will increase by 3.5% and also the selling price will increase by 4% every year (reference 4). These figures are based on the current rate inflation of 4% which is shown in appendix 9 The capital allowances are worked out on cased of 20% (Reference 5) and the annual investment allowance is £100,000 is available (Reference 6) in the first year which is restricted to £87,359. This figure is substrated from the acquisition giving a result of £332,641 which is the written down value.
Fixed expenses are $424,000 per month. The marketing manager believes that a $7,000 increase in the monthly advertising budget would result in a 100 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. Increase of $8,000 B.
b.) Ken sold 1,000 share of stock for $32 a share. He inherited the share two year ago. His tax basis (or investment) in the stock was $31 per share. He must declare the sales proceeds.
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.
The first step in helping Prescott was to calculate a new cost of capital—as the one used by WPC was 10 years old. I used the weighted average cost of capital equation to calculate a new WACC of 9.97%. My calculations are and assumptions are shown in further detail in the attached sheets. Next, I had to generate the free cash flows for years 2007-2013 using Prescott’s given assumptions. * $18 M purchase price * $1.8 M selling price * Investment in PPE (2007) was $16 M * Investment in PPE (2008) was $2 M * $4 M in Sales (2008) * $10 M in Sales (2009-2013) * COGS: 75% of Sales * SG&A: 5% of Sales * $2 M Operating Savings (2008) * $3.5 M Operating Savings (2009-2013) * Depreciation was on a straight-line basis for 6 years beginning in 2008 * $18 M / 6 years = $3 M * 40% tax rate * NWC: 10% of Sales * Salvage value was zero * The FCF per year was determined using the following: * Net Income + Depreciation Expense - ∆ Net Working Capital + Investment in PPE After generating the FCF for each year, I had to solve for NPV and IRR to value the investment.