Answer:
(a) $210,000
(b) $351,500
Explanation:
(a) Given that,
Fair value of equipment = $1,440,000
Face Amount of the note = $1,230,000
Gain on sale:
= Fair value of equipment - Face Amount of the note
= $1,440,000 - $1,230,000
= $210,000
(b) Given that,
Accrued Interest Payable = $290,000
Interest rate = 5%
Gain on the partial settlement and restructure of the debt:
= Accrued Interest Payable + (Face amount of note × Interest rate)
= $290,000 + ($1,230,000 × 5%)
= $290,000 + $61,500
= $351,500
Answer:
The required rate of return is 12.13%
Explanation:
According to the DDM model, the formula for a price of a stock is
P=D1/R-G
D1= Year end dividend
P= Stock price
R= required rate of return
G= Growth rate of stock
SO we will input the values given to us in the question, in this formula.
145=11.80/(R-0.04)
145R - 5.8=11.80
145R= 17.6
R=17.6/145
R=0.121
R= 12.13%
Answer:
The correct answer is letter "A": the five forces framework.
Explanation:
Porter's Five (5) Forces is an analysis scheme created by American economist Michael E. Porter (born in 1947). The ultimate goal of this analysis is to help managers set their expectations of profitability because as competition increases, profitability decreases. Three of the five forces relate to those involved in the industry. The other two apply to the suppliers, the vertical participants, and consumers.
(B) most usually stem from collaborative efforts with strategic allies.
(C) are usually bundles of skills and know-how that most often grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
(D) tend to result in competitive advantage when they involve highly specific technologies and are grounded in a company's own deep technical expertise.
(E) typically are built rapidly, usually in conjunction with important product innovations.
Answer: C) are usually bundles of skills and know-how that most often grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
Explanation: Core competencies and competitive capabilities are best defined as a collection of skills and know-how that most often grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain. Core competencies are the various arrays of resources and capabilities that the strategic advantages of a business is composed of. Businesses have to define, grow, and exploit its core competencies across work groups and departments in order to succeed against competition. In this they build up capabilities that leads to a better performance in relation to their competitors driving profits and gaining more market share.
Answer:
The correct answer is letter "C": are usually bundles of skills and know-how that most often grow out of the combined efforts of cross-functional work groups and departments performing complementary activities at different locations in a firm's value chain.
Explanation:
Core competencies represent all the abilities employees of a company can contribute to improving efficiency and effectiveness. Competitive capabilities are those that allow a company to outstand its competitors' performance. Within a value chain, both core competencies and competitive capabilities must be effectively allocated to increase the firm's comparative advantage.
Answer:
Explanation:
In this scenerio we have to use compound interest formula to find the investmen amount:
FV=PV(1+i)^{n}
FV: Future Value (Ferrari price)
PV: Present Value (Investment amount)
i: interest rate (0.11) (11%)
n: time (8 years)
191,000=PV(1+0.11)^{8}⇒ 191,000=PV×2,3045377697175681
PV= $82,879.96=Investment amount
b. How large a gain or loss in aggregate dollar terms do market signaling studies suggest existing FARO shareholders will experience on the announcement date?
c. What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss?
d. At what price should FARO expect its existing shares to sell immediately after the announcement?
Answer:
a. Market signaling studies suggest that the price of existing FARO shares will fall.
b. $60,000,000
c. 8.403%
d. $38.471
Explanation:
Given
New Shares: $200,000,000
Existing Shares: $17,000,000
Price per Share: 42
a.
Because the stock of the FARO Technologies is overvalued at the current price
b.
Expected Loss: 30% * New Shares Size
New Shares Size = $200,000,000 (given)
Expected Loss = 30% * $200,000,000
Expected Loss = $60,000,000
c.
Percentage of the value of FARO’s existing equity = Ratio of New Expected Share Value to Existing Share Value
Expected Share Value = $60,000,000
Existing Share Value = Price per Shares * Existing Shares
Existing Share Value = 42 * $17,000,000
Existing Share Value = $714,000,000
Percentage of FARO's Existing Equity = $60,000,000 ÷ $714,000,000
Percentage = 8.403%
d.
The price FARO should expect its existing shares to sell
= Price per Share (1 - Percentage of Existing Equity)
Price per Share = 42
Percentage Existing Equity = 8.403%
The price FARO should expect its existing shares to sell = 42(1-8.403%)
The price FARO should expect its existing shares to sell = 42(1-0.08403)
The price FARO should expect its existing shares to sell = 42 * 0.91597
The price FARO should expect its existing shares to sell = $38.47074
The price FARO should expect its existing shares to sell = $38.471 ----- Approximated
The announcement of FARO technologies to sell new shares might decrease their share price as it might signal overvaluation to investors. Existing shareholders may thus experience a loss. The new selling price would be the original price minus the decrease caused by the announcement.
a. The market signaling theory suggests that the announcement of FARO Technologies selling new shares to raise capital could lead to a decrease in the company's share price. This is because it signals to investors that the company may be overvalued, leading them to sell their shares, thereby driving down the price.
b. For existing FARO shareholders, the aggregate dollar loss could be estimated by multiplying the decrease in share price by the number of existing shares.
c. To calculate the percentage of the value of FARO's existing equity that this represents, we could divide the total dollar loss by the company's market capitalization before the announcement, and then multiply by 100 to get a percentage.
d. After the announcement, the price that FARO should expect its shares to sell at would be the original price minus the decrease due to the announcement.
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B) income
C) discount. price.
E) breakeven quantity.
Answer:
D. Price
Explanation:
Price is the amount that is paid by the buyer to the seller in the purchase of the product. And it also deals in exchange for a product which we called barter. The more or less amount while exchange the product is also known as price
It is a measure of an item.
According to the given situation, the most appropriate option is d. as it says that the seller is willing to accept in a given time and in given circumstances that means he is ready for negotiation.