the method that reports the cash effect of each operating activity explicitly on the statement of cash flows is referred to as the method. multiple choice question. indirect comparative comprehensive direct

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Answer 1

The direct method is the method that explicitly includes the financial effect of each operating activity on the cash flow statement.

One of the two accounting treatments that are used to create a cash flow statement is the direct approach. The statement of cash flows direct method does not convert the operational section from accrual accounting to a cash basis; rather, it uses real cash inflows and outflows from the company's activities.

When income is earned rather than when a customer pays, it is recorded using accrual accounting. Only the cash that has been received, which is often from customers, and the cash payments or outflows, such as to suppliers, are measured by the cash flow direct approach.

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Related Questions

bmm industries pays a dividend of $3.00 per quarter. the dividend yield on its stock is reported at 5.80%. what is the stock price?

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A dividend is the distribution of a company's earnings to its shareholders and is determined with the useful resource of the usage of the company's board of directors.

The required details for dividend in given paragraph

Annual dividend =(Quarterly dividend)*4

=$3*4=$12

Current inventory charge=(Annual dividend)/(Dividend yield)

=$12/(5.8%)

=$206.8965517 or $206.90 (Rounded to two decimal places)

Answer: $206.90

Dividends are regularly disbursed quarterly and can be paid out as coins or within side the shape of reinvestment in extra inventory. The dividend yield is the dividend in step with proportion and is expressed as dividend/charge as a percent of a company's proportion charge, together with 2.5%. Common shareholders of dividend-paying corporations are eligible to obtain a distribution so long as they personal the inventory earlier than the ex-dividend date. Dividends should be permitted with the aid of using the shareholders with the aid of using vote casting rights.

Although coins dividends are common, dividends also can be issued as stocks of inventory. Various mutual price range and exchange-traded price range (ETFs) additionally pay dividends.

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the southern division of knucklehead company has a return on investment of 15% and an investment turnover of 1.2 what is the profit margin

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The profit margin of the Southern division of Knucklehead Company is 12.5%.

What is meant by profit margin?

Profit margin evaluates how much of each dollar in sales or services your company retains from its earnings and is stated as a percentage. When the net income of the business is divided by the net sales or revenue, the result is the profit margin. Profit margin is calculated as profit multiplied by revenue.

There is a net profit margin as well as a larger gross profit margin (smaller).  A bigger profit margin is always preferred because it indicates that the business makes more money from its sales. Profit margins indicated in percentage, however, might differ by industry. Retail businesses may have lower profit margins than growth companies, but they make up for this with bigger sales volumes.

A division's return on investment (ROI) = profit margin x investment turnover.

Given:

0.15 = profit margin x 1.20.

Profit margin = 0.15 / 1.2 = 0.125

So, 0.125 x 100 = 12.5%

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imagine that you are a human resource manager at an online retailer. what will you do in order to know whether you will be giving layoff notices to your programming staff or recruiting for additional programmers?

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The first thing you should do when handling a complicated layoff situation is to call your HR consultant.

You have the knowledge and assistance necessary to create and carry out a successful plan for personnel reduction.Outplacement consultants' and other support services' workloads are adequately planned out and coordinated.

You have a communication strategy in place that will give employees timely information that is tailored to their requirements and mindful of workplace dynamics.

To ensure that the positions that need to be removed are effectively identified, layoff seniority and employee job skills are properly taken into account.Understanding where bumping can happen can help you evaluate the effects on the organization.

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George has a monthly income gross of 3500 and his monthly debt payments are 325 car payments 290 student loan payment 930 mortgage payment and 400 in credit card payment what is the total debt to income ratio rounded to the nearest percent

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A standard rule of thumb is to preserve your ordinary debt-to-income ratio at or under 43%.

What debt-to-income ratio is too high?

Debt-to-income ratio is your monthly debt obligations compared to your gross month-to-month income (before taxes), expressed as a percentage. A excellent debt-to-income ratio is less than or equal to 36%. Any debt-to-income ratio above 43% is regarded to be too lots debt.

What is the easiest debt-to-income ratio for a mortgage?

Ideal debt-to-income ratio for a mortgage

In phrases of your front-end and back-end ratios, lenders normally seem to be for the best front-end ratio to be no greater than 28 percent, and the back-end ratio, together with all month-to-month debts, to be no greater than 36 percent.

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In the united states for the year​ 2020, the federal government had a​ ________ so the national debt was​ ________.

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The federal government in the United States ran a budget deficit in 2012, which resulted in an increase in the country's debt.

How does a budget deficit start?

People's salaries decrease in a bad economy, which results in the government collecting less tax revenue and spending more on social safety net services like food assistance or unemployment insurance. One reason why deficits often increase (or surpluses decrease) during recessions is due to this.

What occurs when the fiscal deficit widens?

The amount of public sector debt rises as a result of a budget imbalance. National debt will rise as a percentage of GDP in countries with large deficits. Interest on debt has an opportunity cost. A greater deficit will also result in a higher percentage of the nation's income going toward paying interest on the debt.

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during which stage of new-product development do marketers abandon the largest number of product ideas?

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The stage in New - Product development that marketers abandon the largest number of product ideas is Screening Product Ideas.

What happens at the Screening Product Ideas stage?

At the Screening Product Ideas stage, the company checks the different product ideas that they have to see which ones best fit their goals and aims as a company that wants to solve a certain issue in the market.

The Screening Product Ideas stage, therefore leads to the largest number of product ideas being abandoned by marketers. The ideas that are left are then put through further scrutiny in the later stages.

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Suppose a tax of $1 per unit is imposed on a good. The more elastic the supply of the good, other things equal, the.

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Suppose a tax of $1 per unit is imposed on a good. The more elastic the supply of the good, other things equal, the the larger is the deadweight loss of the tax.

What Is a deadweight loss of taxation?

The measurement of loss brought on by the introduction of a new tax is referred to as the deadweight loss of taxation. This is the outcome of a new tax that is higher than what is typically paid to the taxing body of the government. A tax's impact on consumer surplus is known as "deadweight loss."

The amount of money the government makes when a tax is imposed on a good is exactly equal to the surplus that the tax causes to be lost by consumers and producers. A deadweight loss occurs when supply and demand are out of balance, leading to market inefficiencies. Deadweight losses are generally caused by an inefficient resource allocation that is brought about by a variety of interventions, including price floors, ceilings, monopolies, and taxes.

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The complete question is:

Suppose a tax of $1 per unit is imposed on a good. The more elastic the supply of the good, other things equal:

a. the smaller is the response of quantity supplied to the tax.

b. the larger is the tax burden on sellers relative to the tax burden on buyers.

c. the larger is the deadweight loss of the tax.

d. All of the above are correct

the aggregate demand curve shifts when there are changes in: multiple choice the price level. aggregate spending that are not caused by changes in output or the price level. planned spending that are caused only by changes in output or the price level. real gdp or real output and income.

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The aggregate demand curve shifts when there are changes in planned spending that are caused only by changes in output or the price level.

What is the aggregate demand curve?

An aggregate demand curve serves as the curve that do shows the total spending on domestic goods as well as the  services  which is been shown at  each price level.

It should be noted that the aggregate demand curve,  can shift depends on the situation, for instance it can shifts to the right as the components of aggregate demand due to :

consumption spending investment spending government spending

In conclusion, there can be a shift in the aggregate demand curve as a result of the planned spending  which comes due to only by changes in output .

Therefore, the second option is correct.

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which of the following is a signature that transfers a check to a specific party for a specific purpose? multiple choice blank endorsement. full endorsement. restrictive endorsement. negotiable endorsement.

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Negotiable Endorsement is a signature that transfers a check to a specific party for a specific purpose.

What is a Negotiable Endorsement?

An endorsement is the act of a holder of a negotiable instrument signing his or her name on the document's reverse in order to transfer title or ownership. An endorsement could be made on behalf of a different person or company. The holder may renegotiate a promissory note, bill of exchange, or check payable to order by indorsing and delivering the instrument. 47. A promissory note, a bill of exchange, or a check payable to the bearer is negotiable by delivery of the instrument, subject to the restrictions of section 58.

Hence, Negotiable Endorsement is a signature that transfers a check to a specific party for a specific purpose.

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madison company issued an interest-bearing note payable with a face value of $10,200 and a stated interest rate of 8% to metropolitan bank on august 1, year 1. the note carried a one-year term. based on this information alone, what is the amount of total liabilities appearing on madison's balance sheet as of december 31, year 1?

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The amount of total liabilities appearing on madison's balance sheet as of december 31, year 1 is: $10,540.

How to find the total liabilities?

Using this formula to find the total liabilities

Total liabilities = Face value + (Face value × interest rate × 5/12)

(August 1 to December 31 = 5 months)

Let plug in the formula

Total liabilities = $10,200 + ($10,200 × 8% × 5 months/ 12 months)

Total liabilities = $10,200 + $340

Total liabilities = $10,540

Therefore the total liabilities  is $10,540.

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which amazon audience can be used to reach shoppers who recently viewed or purchased items in a specific category or sub-category?

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Am-azon's in-market audience can be utilized to connect with customers who recently browsed or bought products in a certain category or subcategory.

What does "in-market audience" mean?

You can identify clients who are actively contemplating purchasing something similar to what you offer while they visit web pages using in-market audiences.

What kind of user can viewers in the market categorize?

On the other side, in-market audiences concentrate on customers or sales cycle bottom-dwellers. However, because they are prepared to buy, they are more transient than affinity audiences. After making a purchase, they have probably met their demand.

Am-azon audience insights: What are they?

Reporting that gives you details about your Am-azon buying interactions is one example of audience insights. Even if a brand is new to advertising, insights provide information on how buyers presently browse and buy products from that brand on Am-azon.

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Any company making more than $18,333,333
in a single year must pay how much in income
tax?
A. 35%
B. 15%
C. 25%

Answers

35%hope this helps I pretty sure that this is right.

The difference between a gross material requirements plan and a net requirements plan is that.

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The difference between a gross material requirements plan (gross MRP) and a net material requirements plan (net MRP) is the gross MRP includes consideration of the inventory on hand, whereas the net MRP does not. the gross MRP may not be computerized, but the net MRP must be computerized.

The difference between gross material requirements planning (gross MRP) and net material requirements planning (net MRP) is as follows: Gross disposals include stock consideration, but not net disposals. Gross disposal may not be computerized, but net disposal must be computerized.

Aggregate material requirements planning is the total requirement for an item (before inventory and planned receipts are deducted) and when it should be ordered from the supplier, or when it should start production. It is a schedule that indicates whether specific date. The difference between gross requirements planning and net requirements planning is that in net requirements planning, on-hand and planned receipts are adjusted at each level. The required quantity of each item, including the demand for parts and the demand for spare parts to produce the parent item, is called demand. The unified demand for each period is called aggregate demand.

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hacker software has 11.8 percent coupon bonds on the market with 15 years to maturity. the bonds make semiannual payments and currently sell for 108.7 percent of par. what is the current yield on the bonds? (round your answer to 2 decimal places. (e.g., 32.16)) current yield 10.86 % what is the ytm? (round your answer to 2 decimal places. (e.g., 32.16)) ytm 10.63 % what is the effective annual yield? (do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) effective annual yield %

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The hacker software program has 11.eight percent coupon bonds on the market with 15 years to adulthood. The bonds make an annual yield and currently promote 108.7 percent of par.

The modern yield at the bonds

current yield at the bonds = 11.eight%/108.7%

the current yield on the bonds = 10.86%

The common annual yield is the income received from an investment divided by way of the length of time the funding is owned. an average annual yield is a useful device for studying the return on floating-rate investments.

YTM = price(nper,pmt,pv,fv) * 2

YTM = fee(15*2,59,-1087,a thousand) * 2

YTM = 10.63%

The effective annual yield

effective annual yield = (1+10.sixty three%/2)^2 - 1

effective annual yield = 10.91%

The annual percentage yield is usually calculated by means of multiplying the hobby rate by means of the variety of compounded intervals in line with 12 months.

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what is the purpose of risk sharing with providers? a. it keeps insurance premiums low b. it rewards providers for quality c. it makes providers immune to costs d. it makes providers cost conscious

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The purpose of risk sharing with providers is: d. it makes providers cost conscious.

Importance of risk sharing with providers:

Risk sharing with providers is important because it makes providers cost conscious. By sharing risk with providers, providers are more likely to be aware of the costs of their services and to take measures to control those costs. This can help keep insurance premiums low and make healthcare more affordable for everyone.

The providers  who participate in risk sharing are typically those who provide care for patients with chronic conditions or who are at risk for developing chronic conditions. By sharing risk with these providers, insurers can help to ensure that these providers are appropriately compensated for the care they provide. This can help to improve the quality of care for these patients and to prevent or delay the onset of chronic conditions.

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suppose that the graph below represents the cost function for the entire industry and that the demand curve and marginal revenue curve represent the entire market. if the oligopoly acted as a single decision maker, what quantity would it choose to maximize industry profit?

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A small group of businesses that are able to coordinate their prices and output should set their prices and output at the same levels as a monopoly.

Describe a monopoly.

A monopoly is a market system where one producer or seller holds a monopolistic position in a given area or industry. In free-market economies, monopolies are opposed because they impede competition and restrict consumer alternatives.

Antitrust laws are in existence in the United States to prevent monopolies, guaranteeing that one company cannot have complete control over a market and use that control to take advantage of its customers.

A company that has a monopoly is one that lacks substitutes for its product in the market and faces no competition from them. Monopolies can impose price changes and put obstacles in the way of competitors entering the market.

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4. Determine the importance of environment conservation from the business viewpoint​

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Answer:

Economic expansion is not what is causing the climate crisis; rather, the lack of effective public policy meant to lower greenhouse gas emissions is to blame. As long as regulations are in place to limit the environmental effects of the goods and services we produce and use, there is no conflict between capitalism and environmental protection. With those regulations in place, consideration for environmental sustainability can and will be factored into every decision made by the private, nonprofit, and governmental organizations from which we all benefit.

The sustainability of the environment is not affected in the same way by all consumption patterns. The emergence of more sustainable lifestyles can be seen in consumption trends. Young Americans, for instance, don't seem as interested in buying cars as their parents and older siblings did. The advancement of the mobile phone has made ride-sharing, bike-sharing, and other transit options possible.

However, taking an Uber or driving your own car are both considered economic activities for the purposes of calculating GDP. These consumption patterns are typically not the subject of policymaking because they are quite influenced by shifting social norms than by governmental action. The only exceptions might be behavior that directly harms other people, like drinking and driving or smoking in public. New technologies can also lessen the impact of consumption on the environment.

Ironically, some environmentalists and some deniers of global warming share the view that environmental protection and economic growth must be compromised. Both can and must be done. Because most people in the developed world enjoy their way of life and won't give it up, we cannot stop investing in economic development. Environmental advocates will fail politically if they make such a request.

Explanation:

Political and business leaders may not care if economic growth harms the environment, and environmentalists may disagree, contending that neither economic growth nor environmental harm can coexist.

Even by itself, environmental protection promotes economic expansion. The air pollution control technologies we install on power plants and automobiles are made and sold by a third party. Additionally, environmental amenities are valuable.

when evaluating a sales proposal before submitting it to a buyer, a salesperson needs to verify if his or her sales proposal is well-written and that it:

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When evaluating a sales proposal before submitting it to a buyer, a salesperson needs to verify if his or her sales proposal is well-written and that it: describes all of the seller's fees,prices and expenses buyers will incur.

The salesperson is accountable for greeting clients, helping them discover items in the shop, and ringing up purchases. To be successful as a salesperson you should have first-rate conversation abilties. a great shop clerk meets income targets whilst closing polite and helpful to clients.

A salesclerk is a person who sells a service or product, and his or her fundamental objective is making income. The salesclerk may additionally or may not without a doubt be obsessed on the product or service. she or he is maximum interested in getting cash.

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to meet its objectives in union organizing, a union need not convince workers that they should receive better pay or other employment conditions because those are rights for all workers. group startstrue or false

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It's true that a union does not need to persuade employees that they should have better pay or other working circumstances because they are rights for all employees in order to accomplish its goals in union organizing.

In addition to benefiting employees, unions also benefit communities and democracy.Positive results across a number of indices of economic, personal, and democratic well-being are related with high unionization rates.

There has been talk for a long time that unions change the employee-employer relationship and may have an impact on worker incentives.Companies claim that when pay are uniform, good working conditions are ensured, and layoffs are restricted, employees are less motivated to put in extra effort.

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what does unrelated diversification provide? (choose every correct answer.) multiple select question. performance that is rarely better than the sum of what the individual business units could have achieved independently very general, low-value resources for the subsidiaries a limited potential for competitive advantage very specialized, high-value resources to the subsidiaries

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Unrelated diversification provide performance that is rarely better than the sum of what the individual business units could have achieved independently very general.

Diversification is a approach that mixes a huge sort of investments within a portfolio in an try and lessen portfolio hazard. Diversification is most usually performed via investing in distinctive asset instructions inclusive of stocks, bonds, actual estate, or cryptocurrency.

Diversification is the manner of allocating capital in a way that reduces the publicity to any one particular asset or threat. A commonplace direction in the direction of diversification is to reduce threat or volatility via investing in a spread of belongings.

Diversification is the practice of spreading your investments round in order that your publicity to any individual form of asset is restricted. This practice is designed to help reduce the volatility of your portfolio over the years.

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f a manufacturer produces a defective product, sells it to a wholesaler, who sells it to a retailer, who sells it to a consumer, who is injured, which parties in the chain of distribution are potentially liable under strict liability? only the manufacturer. only the manufacturer and wholesaler. the manufacturer, wholesaler, and retailer. only the party at fault.

Answers

Parties in the distribution chain who are potentially liable under strict liability in the presence of manufacturing companies that produce defective products, sell them to wholesalers, sell them to retailers, and cause injury to consumers are manufacturers, wholesalers, and retailers. Hence, the correct option is (C).

What is the Strict Liability in a Distribution Process?

Strict liability is a situation where there is a party who must be responsible for the consequences that occur. In the distribution chain in question, the parties responsible for the injury that occurs to consumers are manufacturers, wholesalers, and also retailers. Manufacturing companies have faults for producing defective products, and wholesalers and retailers have faults for selling defective products to consumers.

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An increase of one on the richter scale represents ____ increase in the movement of the earth.

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An increase of one on the Richter scale represents ten times increase

The Richter scale measures the size of the greatest ground wave as well as the distance between the earthquake and the scale. The scale can be used to calculate the wave's amplitude and the length of the entire earthquake. The scale offers a number that will allow for the quantification of an earthquake's amplitude. The tiniest earthquakes measurable at the time were given ratings on the original Richter scale that were very close to zero.

For every step up on the scale, the magnitude of an earthquake grows by a factor of ten. Because modern seismographs can detect seismic waves even smaller than those originally designated for zero magnitudes, it is conceivable to evaluate earthquakes with negative Richter scale magnitudes.

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A company produces two products, a and b. at least 30 units of product a and at least 10 units of product b must be produced. the maximum number of units that can be produced per day is 80. product a yields a profit of $15 and product b yields a profit of $8. let a = the number of units of product a and b = the number of units of product b.

Answers

The objective function that can be used to maximize the profit is :

P(a,b)= 15a + 8b.

What is an objective function?

An objective function is a linear representation of the form Z = ax + by, where a, b are constraints and x, y are variables that must be maximized or minimized. The decision variables are variables x and y. The objective function of a linear programming problem is required to find the optimal solution: maximise profit, minimise cost, or minimise resource use, right resource deployment.

The objective function is calculated as:

Let a = units of A produced

Let b = units of B produced

At least 30 units of product A and 10 units of product B are required daily, and the maximum number of units per day should not exceed 80.

Therefore

a ≥ 30

b ≥ 10

a + b ≤ 80

Product A yields a profit of $15 and product B yields a profit of $8.

Therefore the objective profit function is:

P(a,b) = 15a + 8b.

Therefore, the objective function is P(a,b) = 15a + 8b, subject to

a >= 30;  b>= 10;  a+b <= 80.

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The effect of repurchasing stock using the cost method is to ______. (check all that apply. ).

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The effect of repurchasing stock using the cost method is to

Increase Treasury StockDecrease stockholders' equityDecrease Assets.

What is stock repurchasing?

Stock repurchasing refers to the act of buying back the stores of a company from the marketplace. The goal of stock repurchasing is often to increase the financial strength and presence of an organization.

Stock repurchasing will also ensure that the company will be able to gain more integrity in the marketplace. Companies often repurchase stock when they have enough cash at hand. When the cost method is used for this purpose, it will help to decrease assets, increase treasury stock and decrease stockholders' equity.

Complete Question:

The effect of repurchasing stock using the cost method is to ______. (Check all that apply.) Multiple select question. decrease assets decrease stockholders' equity increase Treasury Stock decrease liabilities increase liabilities decrease Treasury Stock increase assets

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Daphne works as the only salesperson in her aunt’s tax preparation business. Describe the selling process for a small business like this one, and how the steps of the sales process differ based on her situation.

Answers

Prospecting is the initial stage of the sales process. You locate potential clients in this stage and assess whether they require your good or service and whether they can afford what you have to offer.

What is the Selling process?

The series of actions a salesman takes to market a product is known as the selling process. The selling process is a full cycle that begins with customer identification and ends with contract closure. It applies more to business-to-business sales where the sales cycle is lengthier and may take longer to close. The selling process may be quicker and more sporadic in B2C.

Prospecting, pre-approach, approach, presentation, resolving objections, closure, and customer follow-up are just a few of the steps in the selling process.

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Sales process different in her situation because of the applying the applicable tax rate to the entire sales price yields the amount of tax owing on taxable sales.

what is tax?

a tax that is required to be paid to the state and is either added to the price of some products, services, and transactions or is imposed by the government on the income of employees and corporate earnings.

Fundamental method for nations to produce public revenues that enable them to support investments in human capital, infrastructure, and the provision of services for citizens and businesses is through the collection of taxes and levies.

Thus, Daphne's tax preparation is different from sales process steps.

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owners of limited liability companies enjoy flow-through treatment of income and losses. group of answer choices true false

Answers

A limited liability company (LLC), like a corporation, restricts the liability of its investors (called members) to the amount of their investment. The LLC, like a limited partnership, distributes all of its revenues and losses to its investors without being taxed. As a result, it is correct.

What is a Limited liability company?

A limited liability corporation is a private limited company in the US. It is a type of company form that can combine the limited liability of a corporation with the pass-through taxation of a partnership or sole proprietorship.

According to state law, an LLC is not a corporation; rather, it is a type of firm that offers its owners limited liability in many jurisdictions.

The freedom that LLCs give business owners is well recognized; depending on the scenario, an LLC may choose to use corporate tax laws rather than being classified as a partnership, and, in some cases, LLCs may be structured as not-for-profit entities.

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decentralized market-based financial systems improve the allocation of saving by multiple choice none of the other answers are correct. ensuring capital gains exceed dividend payments. matching net capital inflows to net capital outflows. providing information and risk-sharing services. eliminating the need for commercial banks or other financial intermediaries.

Answers

Decentralized market-based financial systems improve the allocation of saving by providing information and risk-sharing services.

Decentralized finance (Defi) is a rising monetary technology that challenges this centralized banking industry. Defi eliminates the fees that banks and alternative monetary corporations charge for the victimization of their services and promotes the employment of peer-to-peer, or P2P, transactions.

Decentralized finance (Defi) may produce new risks similar to previous ones. Scientists have known 5 in particular: smart-contract risk, oracle risk, tutelar risk, environmental risk, and regulative risk. Smart-Contract Risk: a sensible contract is an automatic, self-executing agreement between parties.

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What do you consider to be the three greatest opportunities for mnes in emerging market countries?.

Answers

The three greatest opportunities for MNCs in emerging market countries are:

Because of their younger, increasingly prosperous populations, emerging markets will drive an explosion in consumer spending.

Real (inflation-adjusted) expenditure will grow at triple the rate in developed countries, owing to the continued expansion of the internet and mobile connectivity.

Emerging markets may be subject to political uncertainty and volatile commodity prices, but they also happen to be among the fastest-growing economies in the world. An explosion in consumer spending will soon offer massive opportunities to companies that can learn to navigate this uniquely challenging business environment.

Companies that ignore these opportunities risk missing out on decades of future returns.

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The most problematic sources are those that: A. Provide the least information about their author and original source of information B. Contain information that is biased C. Contain information only from secondary sources D. Provide one outlook on the information being presented

Answers

The most problematic sources are those that provide the least information about their author and original source of information. A material or device that emits radiation, whether ionising or non-ionizing, and that needs to be licensed by the Australian Radiation.

The protection and Nuclear Safety Authority is referred to as a problematic source. Investments, operations, and financing These three streams of business cash flow can significantly impact the development and viability of your organization. The sources of company finance include retained earnings, equity, term loans, debt, letters of credit, debentures, euro issuance, working capital loans, the venture capital investments, etc.

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Answer: I believe the answer is A.

Explanation: I really hope this helps and have a fabulous day!

you purchase a $1,000 face value convertible bond for $975. the bond can be converted into 150 shares of stock. the stock is currently priced at $5.25. at what minimum stock price would you be willing to convert?

Answers

purchased a $1,000 face value convertible bond for $975. The bond may be exchanged for 150 shares of stock. The stock is currently valued at $5.25. The least price per share that will be charged is $6.5.

A bond is a sort of instrument in which the issuer owes the bearer a debt and is required, depending on the terms, to repay the bond's principal and interest over a predetermined period of time at the bond's maturity date. A stock usually referred to as equity, is a type of investment that denotes ownership in a portion of the issuing company. Shares, also known as units of stock, entitle their owners to a share of the company's assets and profits in proportion to the number of shares they own. A share price is the cost of one equity share among many sellable shares of a company. The stock price, put simply, is the highest price someone is willing to pay for the stock or the lowest price at which it can be purchased.

Minimum Stock Price * 150 = 975

MSP = 975 / 150 = $6.5

Therefore, the Minimum Stock Price at which the bond will be convertible is $6.5

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