Opportunity cost arises when money is put into an alternative.
Here, Maureen has invested her money in Microsoft Inc and the opportunity cost is the return that she would have earned had she invested her money in the next best alternative of hers. The next best alternative could be investment in another company's shares or even a deposit in a bank.
maureen owns 200 shares of Microsoft, inc. describe her opportunity cost?
Amani owns shares in Honda Inc. Currently, the market price of the stock is $36.34. Management expects dividends to grow at a constant rate of 6 percent for the foreseeable future. Its last dividend was $3.25. Amani’s required rate of return for such stocks is 16 percent. She wants to find out whether she should sell his shares or add to her holdings. What is the value of this stock? Based on your answer above, should Amani buy additional shares...
23. The Smith family owns 200 shares of Elta stock. The company declared a 5 percent stock dividend. After the distribution of stock dividend, the Smiths will own: A. 200 shares. B. 205 shares. C. 210 shares. D. 410 shares.
Mary owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are 3 open seats in the current election and Mary casts all 300 of her votes for a single candidate. What is the term used to describe this type of voting? O A Condensed B. Straight C. Proxy OD. Aggregate E. Cumulative
18. John Simpson purchased 10 shares (cost per share $21) of Microsoft stock in its IPO on March 13, 1996. He has held the investment since the original purchase and has not reinvested any cash dividends. The stock split history is below. Calculate the number of shares that John owns today and his basis in each share. Assuming the current market price of Microsoft is $70.00 per share, how much capital gain or loss would John need to report if...
Zoom Shoes Inc. has 115,000 shares of stock outstanding. GAS Running Company owns 35,000 shares of Zoom Shoes Inc. Which of the following is true? a.GAS Running Company is the subsidiary company. b.Zoom Shoes Inc. is the parent company. c.GAS Running Company is required to use the equity method for this investment. d.GAS Running Company is required to combine the financial statements of Zoom Shoes Inc. and report as a single company.
Debt-free, Inc., an unlevered firm, is planning to use debt in its capital structure. The firm currently has 5,000 shares outstanding trading at $60 per share. The firm plans to sell 150 6% annual-coupon, 10-year bonds at their face values of $1,000 each and use the proceeds to repurchase some of its shares. When the bonds mature, Debt-free, Inc. plans to reissue new bonds to pay off the principal and to “roll over” its debt this way indefinitely. Assume the...
DeMilo, Inc., owns 100 percent of the 43.000 outstanding shares of Ricardo, Inc. DeMilo currently carries the Investment in Ricardo account at $502.600 using the equity method. Ricardo issues 7,000 new shares to the public for $14.50 per share. How does this transaction affect the Investment in Ricardo account that appears on DeMilo's financial records? Investment in Ricardo should be increased by
Hannah Tywin owns 100 shares of MM Inc. stock. She sells the stock on December 11 for $25 per share. She received the stock as a gift from her Aunt Pam on March 20 of this year when the fair market value of the stock was $18 per share. Aunt Pam originally purchased the stock seven years ago at a price of $12 per share. What is the amount and character of Hannah's recognized gain or loss on the stock?...
Christina, who is single, purchased 400 shares of Apple Inc. stock several years ago for $18,800. During her year-end tax planning, she decided to sell 200 shares of Apple for $8,400 on December 30. However, two weeks later, Apple introduced its latest iPhone, and she decided that she should buy the 200 shares (cost of $8,800) of Apple back before prices skyrocket. (Leave no answers blank. Enter zero if applicable.) a. What is Christina's deductible loss on the sale of...
Abdul owns 200 shares of Intec Corp. stock. The firm is currently an all equity firm with a market value of $42,000,000 and 1,500,000 shares outstanding. Management of the firm is thinking of borrowing 20% of the current value of the firm and buying back shares with the funds. Even if management goes through with the proposed capital structure change, Abdul will keep all of his shares. There are no taxes or other market imperfections. 4. In numbers, what must...