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s344n2d4d5 [400]
2 years ago
13

Jason purchased ABC stock at $40 per share and DEF stock at $35 per share on the same day in 2015. Exactly 6 months later, the A

BC stock is worth $42.00 per share and has not paid a dividend while the DEF stock is worth $36 per share and has paid 2 quarterly dividends of $0.50 each. The holding period returns are _______.
A) ABC, $2.00 and DEF $2.00.
B) ABC 5% and DEF 2.9%.
C) ABC 5% and DEF 5.7%.
D) The holding period return cannot be determined because we do not know the discount rate.
Business
1 answer:
Pachacha [2.7K]2 years ago
7 0

Answer:

C) ABC 5% and DEF 5.7%

Explanation:

Data provided in the question:

Purchasing Cost of Stock ABC purchased = $40 per share

Purchasing Cost of Stock DEF purchased = $35 per share

Time = 6 months

Selling price of share of ABC = $42 per share

Selling price of DEF share = $36

Dividend paid to the DEF = $0.5 each quarter i.e $0.5 twice in 6 months

Thus,

Total dividend paid to DEF = $0.5 × 2

= $1

Now,

For ABC

Total return = Selling price - Purchasing Cost

= $42 - $40

= $2 per share

thus,

Holding period return = [ Total return ÷ Purchasing cost ] × 100%

= [ $2 ÷ $40 ] × 100%

= 5%

For DEF

Total return = Selling price + Dividend received - Purchasing Cost

= $36 + $1 - $35

= $2 per share

thus,

Holding period return = [ Total return ÷ Purchasing cost ] × 100%

= [ $2 ÷ $35 ] × 100%

= 5.7%

Hence,

option C) ABC 5% and DEF 5.7%.

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Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the begin
Katena32 [7]

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Total Estimated total machine-hours (MHs) 10,000

Estimated total fixed manufacturing overhead cost= $45,800

Total Estimated variable manufacturing overhead cost- per MH= $1.90 +  $2.10= $4

To calculate the estimated manufacturing overhead rate we need to use the following formula:

<u>Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base</u>

<u>Estimated  FIXED manufacturing overhead rate=</u> (45,800/10,000)= $4.58

7 0
2 years ago
In the period 2011, Lott Inc. performed services for $120,000 and billed its customers. The company subsequently collected $82,0
boyakko [2]

Answer:

The amount of cash flow from revenue that will appear on the statement of cash flows is $120,000.

Explanation:

the amount pf cash flow from revenue that will appear on the statement of cash flows is $120,000 because irrespective of whether it is collected or not he must consider the full value of accounts receivable and the collection amount out of the account receivable will be adjusted in the cash flow from operating activities.

Therefore, The amount of cash flow from revenue that will appear on the statement of cash flows is $120,000.

3 0
2 years ago
Summers, Inc., has net income of $50 million in the current year. Stockholders’ equity at the beginning and the end of the curre
vovikov84 [41]

Answer:

ROE = 33.33%

Explanation:

<em><u>return on equity:</u></em>

\frac{income}{average \: equity}

<em><u>where:</u></em>

Average equity

$$(beginning + ending equity) \div 2

(140 + 160) / 2 = 150

return on equity : 50 / 150 = 1/3 = 0.3333 = 33.33%

The ROE measures the effectiveness of the managers to generate profit with their current net assets(equity)

This ROE of 33.33% rrepresent that for every dollar of equity the company generates 33 cents of income

5 0
2 years ago
To add a pie chart, first select the data to be charted and then tap or click the Insert Pie or Doughnut Chart button (INSERT ta
valina [46]

The given statement " To add a pie chart, first select the data to be charted and then tap or click the Insert Pie or Doughnut Chart button (INSERT tab | Charts group) " is TRUE

Explanation:

A pie chart is a circular mathematical diagram separated into slices that display numerical proportions. The length of each piece in a pie chart is proportional to the amount it represents.

In other words, each piece of the pie is relative to the size of the party in its entirety. The whole pie is 100% whole, while the pie "slices" represent portions of the whole.

You must have a list of both the category (description of your categories) and numerical variables to construct a pie chart.

Tables can be hard to draw by hand, in particular for tricky numbers. The entire pie is 360 degrees, making drawing 13.9% or 56% difficult. With the range of computer programs, it is not really important that you can create pie charts.

6 0
2 years ago
Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,800 rackets and sold 5,700. Each
krok68 [10]

Answer and Explanation:

The preparation of an income statement under variable costing is shown below:-

                   Income statement under variable costing

                                        ACES INC

Sales                                                          $558,600

(5,700 × $98)

Less:

Cost of goods sold

Variable product cost            $147,060

($25.80 × 5,700)

variable selling administrative

expenses ($2.80 × 5,700)      $15,950

Less: Total variable cost                       $163,020

Contribution margin                              $395,580

Less: Fixed overhead cost                    $93,840

Less: Fixed and selling

administrative expenses                       $66,000

Net income                                             $235,740

6 0
2 years ago
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