You have an option contact to buy Davod LTD for R23 per share. SAFEX
Question You have an option contact to buy Davod LTD for R23 per share. SAFEX has advised you that the counterparty to the transaction does not own the Davos Limited Shares. The option contract has a maturity date in one month’s time , but you know that the JSE securities Exchange is trading Davos Limited at R24 per share and SAFEX has coded the option as “exercisable”. Which of the following most accurately describes the option you holda)Holder or buyer of covered American put option in the moneyb)Writer or seller of a uncovered European call option out of the moneyc)Writer or seller of a covered American put option out of the moneyd)Holder or buyer of uncovered American call option in the moneye)Holder or buyer of covered European call option in the money
please can explanation be included and do no round up so i can understand better
Question please can explanation be included and do no round up so i can understand better 1) (Break-even point and selling price) Simple Metal Works, Inc. will manufacture and sell 250,000 units next year. Fixed costs will total $ 270,000, and variable costs will be 55 percent of sales.a. The firm wants to achieve a level of earnings before interest and taxes of $300,000. What selling price per unit is necessary to achieve this result? (Round to three decimal places.)b. Set up an analytical income statement to verify your solution to part (a).2)(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men’s and women’s dress shoes for independent merchants. The average selling price of its finished product is $85 per pair. The variable cost for this same pair of shoes is $65. Footwear Inc. incurs fixed costs of $190,000 per year.a. What is the break-even point in pairs of shoes sold for the company?b. What is the dollar sales volume the firm must achieve to reach the break-even point?c. What would be the firm’s profit or loss at the following units of production sold: 4,000 pairs of shoes? 10,000 pairs of shoes? 16,000 pairs of shoes?3) (Operating leverage) The Quarles Distributing Company manufactures an assortment of cold air intake systems for high-performance engines. The average selling price for the various units is $700. The associated variable cost is $350 per unit. Fixed costs for the firm average $160,000 annually.a. What is the break-even point in units for the company?b. What is the dollar sales volume the firm must achieve to reach the break-even point?c. What is the degree of operating leverage for a production and sales level of 3,000 units for the firm? (Calculate to three decimal places.)d. What will be the projected effect on earnings before interest and taxes if the firm’s sales level should increase by 25 percent from the volume noted in part (c)?4)(Residual dividend policy) FarmCo, Inc. follows a policy of paying out cash dividends equal to the residual amount that remains after funding 30 percent of its planned capital expenditures. The firm tries to maintain a 30 percent debt and 70 percent equity capital structure and does not plan on issuing more stock in the coming year. FarmCo’s CFO has estimated that the firm will earn $ 18 million in the current year.a. If the firm maintains its target financing mix and does not issue any equity next year, what is the most it could spend on capital expenditures next year given its earnings estimate?b. If FarmCo’s capital budget for next year is $ 16 million, how much will the firm pay in dividends and what is the resulting dividend payout percentage?5)(Constant dollar dividend payout policy) Parker Prints is in negotiation with two of its largest customers to increase the firm’s sales dramatically. The increase will require that Parker expand its production facilities at a cost of $ 30 million. Parker expects to pay out $ 6 million in dividends to its shareholders next year. Parker maintains a 20 percent debt ratio in its capital structure.a. If Parker earns $ 18 million next year, how much common stock will the firm need to sell in order to maintain its target capital structure?b. If Parker wants to avoid selling any new stock, how much can the firm spend on new capital expenditures?6)(Stock dividends) In the spring of 2016, the CFO of HTPL Distributing Company decided to distribute a stock dividend to its shareholders. Specifically, the CFO proposed that the company pay 0.04 shares of stock to the holders of each share of common stock such that the holder of 1,000 shares of stock would receive an additional 40 shares of common stock. a. If the firm had total net income for the year of $12,000,000 and had 24,000,000 shares of common stock outstanding before the stock dividend, what was the firm’s earnings per share?b. After paying the stock dividend, what was the firm’s earnings per share?c. If you owned 1,000 shares of stock before the stock dividend, how many dollars of earnings did the firm earn from your 1,000-share investment? After the stock dividend was paid, how many dollars of earnings did the firm earn on your larger share holdings? What effect would you expect from the payment of the stock dividend on your total investment in the firm?7)(Repurchase of stock) The Dunn Corporation is planning to pay dividends of $460,000. There are 230,000 shares outstanding, and earnings per share are $5. The stock should sell for $52 after the ex-dividend date. If, instead of paying a dividend, the firm decides to repurchase stock,a. What should be the repurchase price?b. How many shares should be repurchased?c. What if the repurchase price is set below or above your suggested price in part (a)?d. If you own 100 shares, would you prefer that the company pay the dividend or repurchase stock?
According to the given figure of the treasury yield curve in
According to the given figure of the treasury yield curve in the US as of June 2020, what is the market predicting about the movement of future short-term interest rates? What might the yield curve indicate about the market’s predictions about the inflation rate in the future? Answer the question according to the discussed yield curve theories in the course. Consider the COVID-19 pandemic and the ongoing financial developments for building your arguments.
An investment offers a 14% total return over the coming year. You
Question An investment offers a 14% total return over the coming year. You believe the total real return on this investment to be 9%. What does the inflation rate will be over the next year?Company A has a bond outstanding with 10% coupon rate; 10 year to maturity, and face value of $1,000; interest is payable annually. A similar bond yield to maturity is 7%. By prior agreement the company will skip the coupon interest payments in years 5, 6, and 7. These payments will be repaid without interest at maturity. What is the bond’s value?An investor invested $250,000 in 365-day T-bills 315 days before maturity, to yield 1.12%. He sold the Tbills 120 days later to yield 1.47%. i. How much did the investor pay for the T-bills?ii. For how much did the investor sell the T-bills? iii. What rate of return did the investor realize on the investment
During February 2005, a U.S investor investing in the German stock
Question During February 2005, a U.S investor investing in the German stock market earned a return of -1.47%. During the same month, a Germany investor investing in her local stock market earned a return of 2.358%. The exchange rate at the end of February was 0.7672 €/$. What was the exchange rate (€/$) at the end of January?Please show all work thank you
Corporate Tax Liability
The Talley Corporation had taxable operating income of $470,000 (i.e., earnings from operating revenues minus all operating
Question Corporate Tax Liability
The Talley Corporation had taxable operating income of $470,000 (i.e., earnings from operating revenues minus all operating costs). Talley also had (1) interest charges of $40,000, (2) dividends received of $5,000, and (3) dividends paid of $20,000. Its federal tax rate was 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt.What is the firm’s taxable income? Round your answer to the nearest dollar.$ What is the tax expense? Round your answers to the nearest dollar.$ What is the after-tax income? Round your answers to the nearest dollar.$
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