Discount allowed in valuing stock because you do own more than 50%.O a.fair market value discountO b. lack of marketability discountO c. minority discountO d. blockage discounte.present value discount

There are discounts which are used by the companies in order to get a deal or crack a deal due to…

Answered: Discount allowed in valuing stock…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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am. 131.
a. An initial margin requirement is 54% and maintenance margin of 48%. An investor buys GPH, 9500 shares of stock on margin at Tk. 86.50 per share. The price of the stock subsequently drops to tk. 55.70. a. Find the amount investor has to deposit for initiating the transaction. b. What is the actual margin at tk. 54.25 share price is the account restricted? c. If the price rises to tk. 61.90, is there a margin call? d. Show the amount of margin call is required to bring back account into operational at price of tk. 63.10?
The Royal Gold’s stock currently sells for RM 90 per share. The firm issued rights to raise new equity. To purchase a new share, a stockholder must remit RM 25 and four rights. (Tip: use ratio perspective to approximate the share of quantity.) (a) Compute the ex-rights stock price.
XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price 2019 2020 2021 2022 $88 108 78 88 Dividend Paid at Year-End $4 An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022 Arithmetic average rate of return Geometric average rate of return Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Dollar-weighted rate of return 4 4 4 % % b. What is the dollar-weighted rate of return? (Hint Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2019, to January 1, 2022. If your calculator cannot calculate IRR, you will have to use trial and error or a spreadsheet program.) (Round your…
XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year 2018 2019 Price $ 140 159 132 137 2020 2021 Year-End $ 4 4 4 4 An investor buys five shares of XYZ at the beginning of 2018, buys another three shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all seven remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) Date Cash Flow 01/01/2018 01/01/2019 01/01/2020 01/01/2021
You purchased a share of stock for Rs 250. One year later you received Rs 5 as dividend and sold the share for Rs 320. Holding period return would be a. 12 percent b. 21 percent c. 30 percent d. 54 percent
Determine the value of a share of Max Pax $7.55 cumulative preferred stock to an Investor who requires a 7.85% rate of return. Question 12Answer a. $86.29 b. $78.85 c. $45.50 d. $70.06
Could you walk through the steps of finding the market value weighted index? Company C had a 2 for 1 stock split in P2 Initial Price Orig. Shares outstanding Price year 1 Shares outstanding year 1 Price year 2 Shares outstanding year 2 Apple 90 100 95 100 95 100 Bacon 50 200 45 200 45 200 Cheddar 100 200 110 200 55 400
d. What would the percentage rate of return be on this common stock investment? Compare this to the rate of return on the warrant computed when the common stock was selling for $55 per share. Note: Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places. Percentage return on stock Percentage return on warrants % %
Cost of preferred stock
ILK has preferred stock selling for 95 percent of par that pays a 6 percent annual What would be ILK's component cost of preferred stock? (Round your answer to 2 declmal places.) Cost of preferred stock < Prev s of 8 Type here to search DELL
Common versus Preferred Stock Suppose a company has a preferred stock issue and a common stock issue. Both have just paid a $2 dividend. Which do you think will have a higher price, a share of the preferred or a share of the common?

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