A market has four large companies. One of them has a market share of 50%, a...
A market has four large companies. One of them has a market share of 50%, a second 20%, and the other two 10% each. If 2nd largest and 3rd largest companies want to merger. What is the Pre-Merger Index, Post-merger Index, how much does the Index rise by, and should the merger be allowed.
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A market has four large companies. One of them has a market
share of 50%, a...
Market concentration Suppose that there are 10 firms in a market, and each of them has...
Market concentration Suppose that there are 10 firms in a market, and each of them has an equal market share. What is the value of the Herfindahl-Hirschman Index (HHI) in this market? Suppose instead that in this market one firm dominates such that it has a 90% market share, while the remaining nine firms each have an equal share of the remainder. What is the value of HHI in this case? (Hint! 10% of the market is divided among 9 firms, so each...
Consider two industries, industry W and industry X. In industry W there are five companies, each...
Consider two industries, industry W and industry X. In industry W there are five companies, each with a market share of 20% of total sales. In industry X, there are six companies. One company has a 50% market share and each of the other five firms has a market share of 10%. a. Calculate the four-firm concentration ratio for each industry. b. Calculate the Herfindahl-Hirschman Index (HHI) for each industry. c. What do the values of the two concentration measures imply about the...
You are considering investing in one of two companies. Company A has earning per share of $5 and a market price of...
You are considering investing in one of two companies. Company A has earning per share of $5 and a market price of $40. Company B has earnings per share of $12 and a market price of $120. Based on that information alone, which company should you invest in? Explain your answer, including what ratio you used to inform your investment decision. Do you think that you have reviewed sufficient information to make your decision? What other information or ratios would...
If there are three big telecommunications companies: A, B and C. A has a 60% market...
If there are three big telecommunications companies: A, B and C. A has a 60% market share of all retail cell phone customers, while B and C have a 20% share each. C and B plan to merge. B explains that “by virtue of the increased coverage and capacity created by combining the spectrum assets of the two carriers, the post-merger B will be able to provide the same quality product to consumers at half the marginal cost of B...
Table 25.2 Market Share Output (Revenue) $20,000 $16,000 $2,000 Pool Sweeper (8) North Star Hurricane Blue...
Table 25.2 Market Share Output (Revenue) $20,000 $16,000 $2,000 Pool Sweeper (8) North Star Hurricane Blue Lagoon Clean Sweep $2,000 Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. What is the market share for Blue Lagoon? Suppose there are three firms in a market. The largest firm has sales of $50 million, and each of the other two firms has sales of $25 million. The Herfindahl-Hirschman Index of this industry is Multiple Choice...
Today, a very high percentage of publidy traded companies are audited by only four very large...
Today, a very high percentage of publidy traded companies are audited by only four very large public accounting firms. These firms also do a high percentage of the consulting that is done for publidy traded companies. How does this fact complicate the dedision regarding whether CPAs should be allowed to invest in companies audited by their firm? Suppose IBM audit contract. you were a CPA and you had Invested in 1BM when 18M was not one of your firm's dlients,...
.A. The current market price for XYZ is $52 per share. Initial margin is 50%, maintenance...
.A. The current market price for XYZ is $52 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.95% per year. XYZ pays annual cash dividends of $2.35 per share. 2.A.1) You believe the stock price will increase over the next year and wish to trade exactly one round lot. What trade should you make (2 points)? How much margin would you have to post to your account ? At what price would you receive...
Dividends Per Share Lightfoot Inc., a software development form, has stock outstanding as follows: 15,000 shares...
Dividends Per Share Lightfoot Inc., a software development form, has stock outstanding as follows: 15,000 shares of cumulative preferred 3% stock, $20 par, and 19,000 shares of $50 par common During its first four years of operations, the following amounts were distributed as dividends: first year, $3,450; second year, $5,700;third year, $33,810; fourth year, $63,20. Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no...
2.A. The current market price for XYZ is $52 per share. Initial margin is 50%, maintenance...
2.A. The current market price for XYZ is $52 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.95% per year. XYZ pays annual cash dividends of $2.35 per share. 2.B.1) You believe the stock price will decrease over the next year and wish to trade exactly one round lot. What trade should you make ? How much margin would you have to post to your account ? At what price would you receive a...
2.B. The current market price for ABC is $72 per share. Initial margin is 50%, maintenance...
2.B. The current market price for ABC is $72 per share. Initial margin is 50%, maintenance margin is 35% and there is no margin interest. ABC pays annual cash dividends of $3.75 per share. 2.B.1) You believe the stock price will decrease over the next year and wish to trade exactly one round lot. What trade should you make ? How much margin would you have to post to your account ? At what price would you receive a margin...
You are considering investing in one of two companies. Company A has earning per share of $5 and a market price of $40. Company B has earnings per share of $12 and a market price of $120. Based on that information alone, which company should you invest in? Explain your answer, including what ratio you used to inform your investment decision. Do you think that you have reviewed sufficient information to make your decision? What other information or ratios would...
Table 25.2 Market Share Output (Revenue) $20,000 $16,000 $2,000 Pool Sweeper (8) North Star Hurricane Blue Lagoon Clean Sweep $2,000 Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. What is the market share for Blue Lagoon? Suppose there are three firms in a market. The largest firm has sales of $50 million, and each of the other two firms has sales of $25 million. The Herfindahl-Hirschman Index of this industry is Multiple Choice...
Today, a very high percentage of publidy traded companies are audited by only four very large public accounting firms. These firms also do a high percentage of the consulting that is done for publidy traded companies. How does this fact complicate the dedision regarding whether CPAs should be allowed to invest in companies audited by their firm? Suppose IBM audit contract. you were a CPA and you had Invested in 1BM when 18M was not one of your firm's dlients,...
Dividends Per Share Lightfoot Inc., a software development form, has stock outstanding as follows: 15,000 shares of cumulative preferred 3% stock, $20 par, and 19,000 shares of $50 par common During its first four years of operations, the following amounts were distributed as dividends: first year, $3,450; second year, $5,700;third year, $33,810; fourth year, $63,20. Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no...
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