Homework Answers
19. correct option is: b. They increase the number of shares
20. Correct option is: a. The value of securities depends upon their market price
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19. What is the effect of the exercise of stock options? They increase profit per share....
You have been granted options for 25,000 shares with an exercise price of $10 per share....
You have been granted options for 25,000 shares with an exercise price of $10 per share. If in the future you are fully vested, and if you cashed out your options for what they are worth on a net basis, what total net value did you receive if the stock price was $30 per share? ___________ All of the following are advantages of raising equity through a private placement rather than through a public offering except: The issuer does not...
6) When calculating diluted earnings per share, the effect of stock options: A) Will increase the...
6) When calculating diluted earnings per share, the effect of stock options: A) Will increase the numerator, but never effect the denominator. B) Is included if antidilutive. C) Is included if dilutive.. D) Will never effect diluted earnings per share and can be ignored. DDIOHO ntla n 7) Dulce Corporation had 200,000 shares current year. There were also fully vested options for 10,000 shares of common stock with an exercise price of $20. The market price of the common stock...
a) XYZ stock is trading at $120 per share, and the company will not pay any...
a) XYZ stock is trading at $120 per share, and the company will not pay any dividends over the next year. Consider an XYZ European call option and a European put option, both having an exercise price of $124 and both maturing in exactly one year. The simple (annualized) interest rate for borrowing and lending between now and one year from now is 3% for each 6 month period (6.09% per year). Assume that there are no arbitrage opportunities. Is...
Buckingham Company holds a large portfolio of debt securities as investments. The total fair value of...
Buckingham Company holds a large portfolio of debt securities as investments. The total fair value of the portfolio is greater than its total original cost, even though some of the individual debt securities have decreased in value. Julia, the CFO, and Sam, the Controller, are near year-end in the process of classifying, for the first time, this investment portfolio in accordance with U.S. GAAP. Julia wants to classify those securities that have increased in value during the period as trading...
XYZ stock is trading at $120 per share, and the company will not pay any dividends...
XYZ stock is trading at $120 per share, and the company will not pay any dividends over the next year. Consider an XYZ European call option and a European put option, both having an exercise price of $124 and both maturing in exactly one year. The simple (annualized) interest rate for borrowing and lending between now and one year from now is 3% for each 6 month period (6.09% per year). Assume that there are no arbitrage opportunities. Is there...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of the company consists of 10,000 shares and it not have any debt. Below balance sheet of the company in you can see the market values ORION Balancc Shect Assets 1000,000 Equity 1,000,000 "ORION S.A." is thinking of adopting a new project that will have in present valuce terms 210,000 net cash flows. The initial investment outlay for the project is only €1 10,000. "Orion...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of the company consists of 10,000 shares and it not have any debt. Below balance sheet of the company in you can see the market values ORION Balancc Shect Assets 1000,000 Equity 1,000,000 "ORION S.A." is thinking of adopting a new project that will have in present valuce terms 210,000 net cash flows. The initial investment outlay for the project is only €1 10,000. "Orion...
The stock of “Orion S.A.” is trading €100 per share. Currently, the share capital of the...
The stock of “Orion S.A.” is trading €100 per share. Currently, the share capital of the company consists of 10,000 shares and it not have any debt. Below, you can see the balance sheet of the company in market values: ORION Balance Sheet Assets €1,000,000 Equity €1,000,000 “ORION S.A.” is thinking of adopting a new project that will have in present value terms €210,000 net cash flows. The initial investment outlay for the project is only €110,000. “Orion S.A.” is...
42) What is the effect of each of the following impacts on reserves of. 'X Answer as increase, decrease, ?, no effect (a) New technology in production (b) Increase in production cost (c) Taxe...
42) What is the effect of each of the following impacts on reserves of. 'X Answer as increase, decrease, ?, no effect (a) New technology in production (b) Increase in production cost (c) Taxes (f) Increase in price of "X, (g) New technology in consumption (h) Exploration 43) What is multicollinearity? What impact might it have on the econometric model 44) A property owner is faced with three options (A, B, C) to choose from (A) A large-scale investment (A)...
MULTIPLE CHOICE: 1. What is the long-run objective of financial management? A. Maximize earnings per share B. Maximize...
MULTIPLE CHOICE: 1. What is the long-run objective of financial management? A. Maximize earnings per share B. Maximize the value of the firm's common stock C. Maximize return on investment D. Maximize market share 2. Which of the following statement (in general) is correct? A. A low receivables turnover is desirable B. The lower the total debt-to-equity ratio, the lower the financial risk for a firm C. An increase in net profit margin with no change in sales or assets means a weaker ROI...
6) When calculating diluted earnings per share, the effect of stock options: A) Will increase the numerator, but never effect the denominator. B) Is included if antidilutive. C) Is included if dilutive.. D) Will never effect diluted earnings per share and can be ignored. DDIOHO ntla n 7) Dulce Corporation had 200,000 shares current year. There were also fully vested options for 10,000 shares of common stock with an exercise price of $20. The market price of the common stock...
a) XYZ stock is trading at $120 per share, and the company will not pay any dividends over the next year. Consider an XYZ European call option and a European put option, both having an exercise price of $124 and both maturing in exactly one year. The simple (annualized) interest rate for borrowing and lending between now and one year from now is 3% for each 6 month period (6.09% per year). Assume that there are no arbitrage opportunities. Is...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of the company consists of 10,000 shares and it not have any debt. Below balance sheet of the company in you can see the market values ORION Balancc Shect Assets 1000,000 Equity 1,000,000 "ORION S.A." is thinking of adopting a new project that will have in present valuce terms 210,000 net cash flows. The initial investment outlay for the project is only €1 10,000. "Orion...
Part A The stock of"Orion S.A." is trading 100 per share. Currently, the share capital of the company consists of 10,000 shares and it not have any debt. Below balance sheet of the company in you can see the market values ORION Balancc Shect Assets 1000,000 Equity 1,000,000 "ORION S.A." is thinking of adopting a new project that will have in present valuce terms 210,000 net cash flows. The initial investment outlay for the project is only €1 10,000. "Orion...
42) What is the effect of each of the following impacts on reserves of. 'X Answer as increase, decrease, ?, no effect (a) New technology in production (b) Increase in production cost (c) Taxes (f) Increase in price of "X, (g) New technology in consumption (h) Exploration 43) What is multicollinearity? What impact might it have on the econometric model 44) A property owner is faced with three options (A, B, C) to choose from (A) A large-scale investment (A)...
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