Fin 221 Fall 2006 Exam 3 Multiple Choice Identify the choice that best completes the statement or answers the question. 1) Ken Williams Ventures’ recently issued bonds that mature in 15 years. They have a par value of $1‚000 and an annual coupon of 6%. If the current market interest rate is 8%‚ at what price should the bonds sell? |A. |$801.80 | |B. |$814.74
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section of the balance sheet will be broken down between paid-in capital and retained earnings. As mentioned above‚ paid-in capital will consist of contribution capital by way of common or preferred stock issue‚ and additional paid-in capital above par value of stock. The reason for separation between paid-in and earned capital is on the basis of either showing as a type of loan to the organization versus the capital raised through sound operations and profitability. Contribution capital is money received
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Dollar-Value LIFO Review Problem XYZ Company began operations on January 1‚ 2010‚ and uses the dollar-value LIFO method for externally reporting inventory. XYZ Company uses an external price index in its calculations. On January 1‚ 2010‚ XYZ Company had an inventory of $50‚000. The following information has been extracted from inventory records: Year Ended December 31 Ending Inventory at Year-End Costs Cost Index (Relative to Base Year) 2010 $56‚160 1.04 2011 $62‚700 1.10 2012
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I. Company Background It was 1900. Mr. Alfredo Salas was planning to enter the food business‚ but why sardines? The canning of sardines was an old and mature industry. There were several competitors which could keep marginal profits to a minimum‚ if not at a loss. The leader in the industry‚ Youngstown‚ only shares 18 to 19 percent of the market. Still‚ everybody eats sardines. Hence‚ to establish a pipeline to reach the masses‚ AFC was formed with sardines as its initial product.
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Problem 8-3. For each of the following situations‚ the present value concept should be applied: 1. Your wealthy aunt just established a trust fund for you that will accumulate to a total of $100‚000 in 12 years. Interest on the trust fund is compounded annually at an 8% rate. How much is in your trust fund today? 2. On January 1‚ you will purchase a new car. The automobile dealer will allow you to make increasing annual December 31 payments over the following four years. The amounts
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Current liabilities: Notes payable ........................................................ $150‚000 Long-term debt: Notes payable refinanced in February 2013 ...... 450‚000 Question 12 On June 30‚ 2004‚ Marmet Company issued 12% bonds with a par value of $300‚000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30‚ 2012. Because of lower interest rates and a significant change in the company’s credit rating‚ it was decided to call the entire issue on June
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Introduction to Corporation Accounting CORPORATION - an artificial being created by operation of law‚ having the right of succession and the powers‚ attributes and properties expressly authorized by law or incident to its existence (New Corporation Code of the Philippines). A corporation is an entity created by law that is separate and distinct from its owners and its continued existence is dependent upon the corporate statutes of the state in which it is incorporated. Characteristics of a Corporation
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Preference share holders get a fixed dividend. 2. Each ordinary share usually carries a vote. Preference share do not usually carry a vote unless dividend fall into arrears. 3. In the event of winding up‚ preference share are usually repayable at par
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EASY [vii]. The owner of a convertible bond owns‚ in effect‚ both a bond and a call option. a. True b. False (21.3) Convertibles Answer: b EASY [viii]. A convertible debenture can never sell for more than its conversion value or less than its bond value. a. True b. False (21.3) Convertibles Answer: a EASY [ix]. Most convertible securities are bonds or preferred stocks that‚ under specified terms and conditions‚ can be exchanged for common stock at the option of the holder
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equity section of Omar Company consists of common stock $600‚000 and retained earnings $900‚000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60‚000‚ $10 par value shares outstanding‚ or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share. Complete the tabular summary of the effects of the alternative actions on the components of stockholders’ equity and outstanding shares.
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