Determine by how much an ABC share/ or the ABC firm is over/(undervalued).

Q: The lower the equidity of a stock, the narrower its bid-ask spread

A: The bid/ask spread is a type of trading cost that the investors incur while trading through a market…

Q: Hd.5. how do we account for compensatory share option plans?.

A: Compensatory share option plans are a type of employee compensation plan where employees are given…

Q: Describe the process to compare a set of mutually exclusive investments with unequal service lives?

A: Companies always face a dilemma when it takes into consideration various projects that are mutually…

Q: Why is the return associated with common stock referred to as a residual claim? Contrast this kind…

A: Common stock holders are the owners of the business. Profits earned by the company will be the…

Q: Does the component cost of preferred stock include or excludeflotation costs? Explain

A: Preferred Stock: The stock that has no right over the decision making of the company against which…

Q: Q.1. Explain what can happen if a share issue is ‘underwritten’ and the effect that underwriting can…

A: Underwriting of shares means when some merchant, institution or bank is appointed to subscribe the…

Q: Differentiate between agency theory and pecking order hypothesis of capital structure. In each case,…

A: Agency theory:-This theory main aim is to resolve disputes over pritorizing different sources of…

Q: he effect of stockholders divided is to

A: A shareholder, sometimes known as a stockholder, is a person, business, or organization that owns at…

Q: What is the effect of a company electing the fair value option with respect to a held-to-maturity…

A: Held-to-maturity security: The debt securities which are held by the investor with an intent to hold…

Q: What determines if a potentially dilutive security is dilutive or anti-dilutive? a. the share price…

A: Earning per share means the profit earned after taxes per share outstanding. Diluted earning per…

Q: 14. Using fundamental analysis, if intrinsic value is greater than the market price per share…

A: If intrinsic value is greater than market price per share, then it means shares are undervalued.

Q: differnce between tradional and mordern dividend policy

A: Traditional Dividend Policy  This approach was given by B. Graham and D. L.Dodd and it lays…

Q: Share option compensation is what accounting subject?

A: Stock-based compensation: It is a way of paying employees, executives, and directors of a company…

Q: Everything else remaining the same, the cheapest source in the calculation of WACC is: A) after tax…

A: Average Cost of Capital (WACC) represents a firm's average after-tax cost of capital from all…

Q: How does a dividend payment impact the option price?

A: The option price(call and put) is impacted by the new information about the announcement of the…

Q: Describe the nature of preference dividend and equity dividend with your own suit

A: Answer: Preference dividend is the dividend that are given on preference shares and equity dividend…

Q: 1. How are passive investments accounted for under ASPE? a) Cost of amortized cost. b) FVTPL…

A:

Q: Explain why P/E Multiples Approach is better than the Book Value per Share approach?

A: A multiple approach is referred to as the valuation theory on the basis of the idea that similar…

Q: 4. How the Stock valuation is normally made? Cost or net realizable value whichever is more Cost and…

A: Stock valuation is the process of analyzing the intrinsic worth of the stock possessed by the entity…

Q: When an acquirer chooses between cash offer or stock offer, which of the followings is the least…

A: Acquisition refers to obtaining the other company wholly or partially by paying the cash…

Q: . Explain the factors that determine beta and how n asset beta can differ from equity betas.

A: Beta - It measures the responsiveness of a stock's  prices to changes in the overall  stock market.…

Q: What is meant by par value, and what is its significance to stockholders?

A: Par Value Par value is also known as face value. Par value is the value which is mention on the…

Q: Explain what capital structure theory attempts to do and demonstrate useful lessons that can be…

A: Capital structure theory refers to a formulated and well-organized structure that reflects the…

Q: What is a callable preference share, redeemable preference share, and convertible preference

A: Callable preference shares are the preference shares that would be redeemed at a predetermined value…

Q: How reliable is the Capital Asset Pricing Model? Can we use it to determine whether to buy the stock…

A: Capital Asset Pricing Model - Under this model cost of equity can be calculated with the help of…

Q: od and Health Company is expanding and has an average-risk project under consideration. The company…

A: Net present value (NPV) is excess of present value of cash inflows over outflows.

Q: Define Restricted Stock Units.

A:

Q: What is the formula for the dividens paid that results in the -787? I am struggling to find the…

A: Lets understand the basics.Cashflow statement is divided into three type of activities which are,(1)…

Q: Explain fractional shares with examples.

A: Stock Splits: It is a method of increasing the total number of outstanding shares thereby, reducing…

Q: Accumulated Reserve on admission of a partner can be divided using? O a. New Profit Sharing Ratio b.…

A: In a partnership, two or more parties agree to operate and manage a business and share the profits…

Q: d calculation fomula different both times

A: If a firm has EBIT in perpetuity, then the value of the firm is calculated as shown below. Value of…

Q: What is the bid-ask spread? What are the components of the bid-ask spread. Use an original example…

A: The greatest amount a buyer will pay for a security is referred to as the bid price and the lowest…

Q: d. Equity beta. e. Asset beta. f. Pure-play comparable.

A: The stock's sensitivity to changes in the market is measured by equity beta, also known as asset…

Q: With the aid of examples, highlight the differences between the following terms: Par value and No…

A: Answer are as follows

Q: Q2: What do all common stock valuation measures have in common?

A: Common stock valuation methods such as price-to-earnings (P/E), price-to-book (P/B), dividend…