Problem 1 A stock sells for $10 per share. You purchase 100 shares for $10 a share (i.e.‚ for $1000)‚ and after a year the price rises to $17.50. What will be the percentage return on your investment if you bought the stock on margin and the margin requirement was (a) 25 percent‚ (b) 50 percent‚ and (c) 75 percent? (Ignore commissions‚ dividends‚ and interest expense.) Initial Stock price per share $10 # of Shares Purchased 100 New Stock price per share $17.50 Gain = New Price - Initial
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powers‚ attributes‚ properties authorized by law – being a creation of law‚ a corporation can only exercise powers provided by law and powers which are incidental to its existence * ownership divided into shares – proprietorship in a corporation is divided into units known as shares of stocks * management is vested in a Board of Directors (BOD) – the governing body or decision making body of the corporation elected by stockholders governs the business ADVANTAGES * capacity to act
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000 shares of $100 par value‚ 6% cumulative and nonparticipating preferred stock‚ and 1‚000‚000 shares of $1 par value common stock. It then Apr. 28 Jul. 16 Aug 6 Sep. 17 Dec. 31 Dec. 31 Issued 100‚000 shares of common stock at $23 per share. Issued 6‚000 shares of preferred stock to Thevenot Corporation for the following assets: equipment with a fair value of $76‚000; a warehouse with a fair value of $240‚000; and land with an appraised value of $320‚000. Purchased 750 shares of common
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1. Explain the nature of a share. Distinguish between an ordinary share and a preference share. Basically‚ a share represents ownership of a portion of the share capital of a company. Also note the discussion in Chapter 1 of the text concerning the relationship between limited liability and the amount paid up on a share. The differences between ordinary and preference shares are determined by the terms of issue. A company has the right to issue preference shares‚ but may only do so either if
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2‚000 EXAMPLE: XYZ Corporation is authorized to sell 1 million shares of common stock; 750‚000 shares have been issued‚ and 50‚000 shares have been reacquired by XYZ. How many shares are outstanding? (Answer: $750‚000 –50‚000 = $700‚000) EXAMPLE: If we issue 12%‚ $200 par value Preferred Stock‚ what is the annual dividend per share? $200 par * 12% = $24 per year per share EXAMPLE: Part 1: Belson Corporation has 10‚000 common shareholders and 5‚000 preferred
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Reconstruction is a process by which affairs of a company are reorganized by revaluation of assets‚ reassessment of liabilities and by writing off the losses already suffered by reducing the paid up value of shares and/or varying the rights attached to different classes of shares. The object of reconstruction is usually to reorganize capital or to compound with creditors or to effect economies. Such a process is called internal reconstruction which is carried out without liquidating the company
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help investors who hold shares in a company to assess the returns on their investment. These are: Dividend per Share The dividend per share ratio relates the dividends pertaining to an accounting period to the amount of shares in issue during the period. The ratio is given as follows: Dividend per share = Dividends pertaining to a period Number of shares in issue The ratio provides an indication of the cash return a shareholder receives from holding shares in a company. Although
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-Martin Industries just paid an annual dividend of $1.30 a share. The market price of the stock is $36.80 and the growth rate is 6.0 percent. What is the firm’s cost of equity? RE = [$1.30 × (1 + 0.060)] / $36.80 + 0.060 = 0.097446 = 9.74 percent (3) - The Bet-r-Bilt Company has a 5-year bond outstanding with a 4.30 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1‚000. This bond is currently selling for 93 percent of its face value. What is the company’s
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and Dividend Policy 1 4 Key Concepts and Skills Cash Dividend Types Understand dividend types and how they are paid Understand the issues surrounding dividend policy decisions Understand the difference between cash and share dividends Understand why share repurchases are an alternative to dividends Regular cash dividend – cash payments made directly to shareholders‚ usually each quarter Extra cash dividend – indication that the “extra” “ t ” amount may not be repeated in the t tb
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eyes‚ Before the cuddles and the coos‚ I share this day with all of you. Each of you brought a wonderful gift‚ everything on baby’s list. Mom is glad to share such bliss‚ I can’t wait to share a baby kiss. I’m not here yet‚ but I’m on my way. Thanks for being here today. Princess Carter A Special Poem For My Baby Shower Guests. Before the diapers‚ smiles and cries‚ before you see my shining eyes‚ Before the cuddles and the coos‚ I share this day with all of you. Each of you
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