Eugene Company decided to issue 1,000 share options to an employee in lieu of many years' service. However, the fair value of the share options cannot be reliably measured as the entity operates in a highly specialized market where there are no comparable entities. The exercise price is Php100 per share and the options were granted at the beginning of current year, when the value of the shares was also estimated at Php100 per share. At the end of the current financial year, the value of the shares was estimated at Php150 per share and the options vested on that date.

Eugene Company decided to issue 1,000 share options to an employee in lieu of many years' service. However, the fair value of the share options cannot be reliably measured as the entity operates in a highly specialized market where there are no comparable entities. The exercise price is Php100 per share and the options were granted at the beginning of current year, when the value of the shares was also estimated at Php100 per share. At the end of the current financial year, the value of the shares was estimated at Php150 per share and the options vested on that date.

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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2. The following table shows the constituent stocks of a hypothetical index. Stock B splits two-for-one during the period. Stock A B C Beginning of Period Price ($) Shares 30 75 36 2,000 500 1,200 End of Period Price ($) 26 40 32 Shares 2,000 1,000 1,200 a. Calculate the returns on both the price-weighted index and the market value- weighted index of three stocks over the period. b. If you just buy 5,000 shares of stock C for $36, hold for 1 year, collect $8 dividend and sell it at $32. Calculate your total return.
Demonstrate the impact of different values on a market value weighted stock index with a hypothetical example considering three stocks (stock A, B and C), no. of shares and price for base year 2020 and for the year 2021 with two different cases Case A and Case B ( base year index value as 100)
30. Questions 30 and 31 are related. Use the following information regarding an equal-weighted equity index and assume that all dividend payments are made at the end of the year and are reinvested in the stock that paid the dividend. Security Price at the End of 2021 Price at the End of 2022 Dividends per Share A $26 $0.50 B $45 $0.20 C $36 $0.40 Ꭰ $135 $0.50 Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index level equals 100. a. b. C. 31. a. b. C. The weight of Security B in the index on December 31, 2022 with dividends reinvested and before rebalancing is closest to: 16.75% 18.55% 19.24% $25 $50 $31.25 $100 7.35% 7.87% The total return on the index referenced in the previous question for the year 2022 is closest to: 8.90% d. 22.16% e. 23.33% f. 25.00% d. 10.53% e. 12.10% f. 12.54%
Consider three stocks, X, Y, and Z, in the following table. P0, P1, and P2 represent prices at time 0, 1, and 2. Q0, Q1, and Q2 represent shares outstanding. Stock Z splits two for one in the last period. Stocks PO Q0 P1 Q1 P2 Q2 ? X 90 100 95 100 95 100 Y 50 200 60 200 45 200 Z 100 200 110 200 55 400 Using the above information to compute an equally weighted average returns in the three stocks from periods 1 to 2 0% O-1.85% -8.33% -25.00%
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