For Proposal 3, the book value of the existing asset is ________. (See Table 11.2)
A) $21,000
B) $43,000
C) $52,000
D) $80,000
D
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Sarcosine Chemicals Corp. issues stock in one of its operating units and sets it up as a separate company called Prussic Corp., with its own board of directors and corporate officers. Sarcosine Chemicals Corp. then distributes the stock in Prussic Corp. to its existing stockholders. Which of the following forms of divestitures does this scenario exemplify?
A. A spin-off B. A tender offer C. A carve-out D. A stock swap
Akai has a portfolio of three assets. Find the expected rate of return for the portfolio assuming he invests 50 percent of its money in asset A with 10 percent rate of return, 30 percent in asset B with a rate of return of 20 percent, and the rest in asset C with 30 percent rate of return.
What will be an ideal response?
Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NAA transaction recorded as a debit to Accounts Payable and a credit to Cash.AssetsLiabilitiesStk. EquityRevenuesExpensesNetStmt. of IncomeCash Flows???????
What will be an ideal response?
The reward-to-risk ratio for stock A is less than the reward-to-risk ratio of stock B. Stock A has a beta of 0.82 and stock B has a beta of 1.29. This information implies that:
A) stock A is riskier than stock B and both stocks are fairly priced. B) stock A is less risky than stock B and both stocks are fairly priced. C) either stock A is underpriced or stock B is overpriced or both. D) either stock A is overpriced or stock B is underpriced or both. E) both stock A and stock B are correctly priced since stock A is riskier than stock B.