On 1 May 20X4 XYZ invests in 18456 call options for Fantasy Travel Limited shares. The options have an exercise price of $100 per share, and willexpire on 30 April 20X6. Price premium for each option is $25. Fantasy Travel Limited's shares price on 1 May 20X4 is $132.The balance sheet date for XYZ Ltd is 30 June. XYZ Ltd accounts for its financial instruments using fair value through profit and loss.Other data:Date30 June 20X430 June 20X530 April 20X6Share Price146131150Option price342443What is the value of the options at the time when XYZ Ltd exercises the options on 30 April 20X6?PLEASE ENTER YOUR ANSWER IN WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS (EG $1,000,000 SHOULD BE SHOWNAS 1000000; -$1,000,000 SHOULD BE SHOWN AS -1000000).

Call option gives the opportunity to buy the stock on expiration but there is no obligation to do…

Answered: On 1 May 20X4 XYZ invests in 18456 call…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Flounder Corp. has the following portfolio of securities acquired for trading purposes and accounted for using the FV-NI model at September 30, 2023, the end of the company's third quarter: Investment Cost Fair Value 47,500 common shares of Yuen Inc. $266,000 $190,000 3,200 preferred shares of Monty Ltd. 121,600 128,000 1,350 common shares of Oakwood Inc. 121,500 120,825 On October 8, 2023, the Yuen shares were sold for $5.60 per share. On November 16, 2023, 3,000 common shares of Patriot Corp. were purchased at $43.80 per share. Flounder pays a 1% commission on purchases and sales of all securities. At the end of the fourth quarter, on December 31, 2023, the fair values of the shares held were as follows: Monty $102,050; Patriot $116,750; and Oakwood $137,025. Flounder prepares financial statements every quarter. (a) Your answer is partially correct. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the portfolio for the fourth quarter of 2023.…
Preference sharesOn 1 March 2020, NOL issued 3 million 4% redeemable preference shares of $1 each at par andaccounted for as an equity. NOL will redeem the preference shares on 1 March 2025 at $4,408,000.The effective interest rate associated with the preference shares is 8%. On 28 February 2021, NOLpaid stated rate preference share dividend for the year to its shareholders. Discuss how each of the above events should account for in the financial statement of NOL for theyear ended 28 February 2021 with reference to relevant HKFRSs
ABC Corporation has an investment of 4,000,000 shares in XYZ Corporation. On December 31, 2021, ABC distributes, to its shareholders, the shares of XYZ in the form of a dividend. This dividend must be recorded in ABC's books for: a. the market value of XYZ stock. b. the market value of ABC shares. c. the book value of XYZ stock.
A man expects to receive ₱25,000 in 8 years. How much is hat money worth now considering interest at 8% compounded quarterly? *
During 2019, Honeymooners Companies issued 4,000 preferred shares with par value of $ 1 to $ 11 each. Each preferred share can be exchanged (convert), at the option of the holder (investor), for three Honeymooners common shares with par value of $ 2. In April 2020, all preferred shares were exchanged. At the time of the exchange, how much must Honeymooners credit to the contributed capital account in excess of par value of commons? Select one: to. $ 44,000 b. $ 0 c. $ 40,000 d. $ 20,000
On February 11, 2021, Brownie Corp. purchased 500 common shares of Candy Inc. for $45,000 and classified the investment as FV-OCI. At December 31, 2021, the fair value of the shares is $42,160. Assuming that Brownie has a December 31 year-end, the required year-end adjusting entry for this investment is: Question 13 options: DR FV-OCI investments $42,160 CR AOCI $42,160 DR AOCI $2,840 CR FV-OCI investments $2,840 DR AOCI $42,160 CR FV-OCI investments $42,160 DR FV-OCI investments $2,840 CR AOCI $2,840
On July 1, 2018 Tam Company purchased 3,000 shares of Del Company capital stock as a temporary investment (trading securities) at $66.50 per share plus a commission of $30. On July 15, a 5 per cent stock dividend was received. Tam received a cash dividend of $0.60 per share on August 12, 2018. On November 1, Tam sold all of the shares for $72.20 per share, less a commission of $30. Prepare entries to record all of these transactions in Tam Company’s accounts.
please prepare the journal entries Q1. Sold 22,500 Treasury shares at $2 each. Q2. Purchased 10% shareholding in Charlie Limited, a supplier, as a long-term investment. The fair value of the 10% shareholding was $2,900,000 as at 1 March. The purchase consideration included a $2,700,000 note receivable due from Charlie Limited and the related interest receivable balance of $144,000, $140,000 cash and a motor vehicle owned by ITI. The motor vehicle was originally obtained at $120,000. ( for depreciation details, refer to Q1 of additional information.) Q3. A 10% share dividend was declared when the market value per share was $2.1. Q4. Paid cash to acquired 30,000 shares of its own at $2.3 each. ITI intends to keep the shares for several months for management bonus.
On July 1, 2019, an interest payment date, 60, 000 of Parks Co, bonds were converted into 1,200 ordinary shares of Parks Co. each having a par value of 45 and a fair value of 54. There is 2, 400 unamortized discount on the bonds. Parks would record :- a. no change in share premium. b. 7, 200 increase in share premium. c. 4,800 increase in share premium. d. 3, 600 increase in share premium.
36. Subject : - Accounting
Purrfect Paws Company issues 1,000 shares of $50 par preferred stock for $250,000. The company is not required to buy back the preferred stock. However, the preferred stock includes a redemption feature that gives the holder the option to redeem the shares for cash at specified dates. This would be classified as ________ under U.S. GAAP and ________ under IFRS. Group of answer choices equity; equity debt; equity equity; debt debt; debt
Venture plc has issues ordinary shares of 20 million £1.00 shares. On 7th June, the Stock Exchange closing price of the shares was £12.00. Early on the morning of 8th June, the business publicly announced that its plan to acquire another business. On 9th June, the business announced its intention to raise the necessary money to finance the acquisition, totaling £100 million, through a rights issue priced at £8.00 per share. Required: (a) Determine how many new shares need to issue and the theoretical ex-rights price. (b) Calculate the value of rights per existing share and the effect on the wealth of a person who owns 200 shares in Venture plc before the rights issue, in each case where the shareholder takes up the rights, sells the rights and does nothing. (c) Discuss why companies make rights issues of equity, rather than raising the equity in some other way.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS