Corporation Z purchased shares of Corporation W. In addition, Corporation Z purchased some put options, (sale options) on those shares. Why would corporation Z buy those put options A) Corporation W's share
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Corporation Z purchased shares of Corporation W. In addition, Corporation Z purchased some put options, (sale options) on those shares. Why would corporation Z buy those put options
A) Corporation W's share price has risen, but Corporation Z believes it might start to decline
B) Corporation W's share price has risen, but Corporation Zbelieves it might start to rise
C)Corporation W's share price has risen, and Corporation Z believes it may continue to rise.
D) The share price of Corporation W is to remain constant
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- Please answer with reason for all why the option is correct and why the other options are incorrectPlease answer correct otherwise skip it When a company buys the stock of another company, the accounting treatment depends on the number of outstanding shares acquired. If a company acquires 35% of the shares (as a percentage of the outstanding shares) of another company, the accounting method the acquirer uses is: - consolidation method - fair value method - equity method - Any of the above. The materiality principle allows the company to choose the method.You are the CEO of a company that has been the subject of a hostile takeover. Thibeaux Piques has been accumulating the shares of your company and now holds a substantial percentage of the outstanding shares. You would like to purchase the shares that he owns. What method of share buy-backs will you opt for?Mr. Yoshiyaki Murakami has secretly bought 11.49% of the shares. Assume that his tender offer for ¥3,456 per Toshiba Machine shares (to buy 43.82% of the shares for ¥25.9 billion) reflects a 19% premium over the price he paid on his initial stake. Assume also that the tender price reflects the true value of the company under Mr. Murakami. What would be Mr. Murakami’s financial gains from the takeover deal if it went through?
- Which of the following statement about a rights issue is correct? a. The share price can be expected to increase on the ex-rights date b. On the ex-rights date the rights separate from the share c. The subscription price is usually greater than the market price d. A rights issue is offered to an investor whether they are an existing shareholder or not e. If you buy shares cum-rights you are not entitled to participate in the rights issueDonated shares will have the effect of reducing? a. Outstanding shares b. Authorized shares c. Treasury shares d. Issued shares 11. Upon exercising share options, the resulting increase in the additional paid-in capital would be equal to a.The difference between the exercise price and the par value of the shares, plus the fair value of the share options b. The difference between the fair value of the shares and the par value of the shares c. The difference between the fair value of the shares and the par value of the shares, plus the fair value of the share options d. The difference between the exercise price and the par value of the shares 1. What is the accounting for treasury share transactions? a. On re-issuance of treasury shares, a gain or loss is recognized equal to the difference between the previous repurchase price and the re-issuance price. b. Treasury shares are…Walton decided to issue additional new common stock. Mr. Adib Rahman, an individual investor purchased 100 shares of this stock from Munawar Associates, the underwriter. Would this transaction be a primary or a secondary market transaction? If Mr. Adib Rahman purchased previously outstanding Walton stock from another investor, then which financial market will this transaction be traded in?
- Why would a corporation redeem its stock? a. To decrease the per-share book value of the stock held by shareholders b. To increase the per-share price of the stock on the open market c. To increase the per-share book value of the stock held by the corporation d. To decrease the per-share book value of the stock on the open marketIf an investor sells an ordinary share at a price above that which he or she originally paid, the investor is said to have earnedSelect one: a.a capital expenditure. b.a capital gain. c.an originating point. d.a dividend. explain well all point of question.Which of the following correctly indicates how the issue price of common stock shares would be valued when a corporation makes a follow-on issue? Market forces determine the selling price, as it is marketed by the selling group The highest expected issue price per share that can be obtained while still selling of all of the shares is selected The highest expected issue price per share that can be obtained, regardless of the selling group's ability to market the shares, is selected The market price of existing shares is used as guidance
- Required: How much is the book value per ordinary share? In case RED Corporation is liquidated, how much would be the total amount to be received by an investor who holds 2,000 ordinary shares and 1,000 preference shares? How much is the book value per ordinary share assuming the preference shares are also participating? Assuming the preference shares are also participating, in case RED Corporation is liquidated, how much would be the total amount to be received by an investor who holds 2,400 ordinary shares and 500 preference shares? Using Problem 1, how much is the book value per ordinary share assuming the preference shares are non-cumulative and participating up to 12%? Assuming the preference shares are non-cumulative and participating up to 12%, in case RED Corporation is liquidated, how much would be the total amount to be received by an investor who holds 2,400 ordinary shares and 500 preference shares?In your opinion, should new C-Level Executives be allowed to purchase company stocks fortheir first few years in position while becoming vested? Why or why not? Does your answer differ basedon the kind of company involved?Indicate whether the following statements are true or false. If the statement is false, explainwhy.a. If a firm repurchases its stock in the open market, the shareholders who tender thestock are subject to capital gains taxes.b. If you own 100 shares in a company’s stock and the company’s stock splits two-forone,you will own 200 shares in the company following the split.c. Some dividend reinvestment plans increase the amount of equity capital available tothe firm.d. The Tax Code encourages companies to pay a large percentage of their net income inthe form of dividends.e. If your company has established a clientele of investors who prefer large dividends,the company is unlikely to adopt a residual dividend policy.f. If a firm follows a residual dividend policy, holding all else constant, its dividendpayout will tend to rise whenever the firm’s investment opportunities improve.