(Please correct answer for this question) Phoebe owns 200 shares in Optus Inc. Optus has 50 million shares outstanding that are trading at $3 each. Due to a liquidity crisis, Optus decides to place 15 million shares to a group of hedge funds at $2 each. How much money did Phoebe lose due to this private placement, based only on the information above? (round to the nearest 2 digits) Group of answer choices $46.00 $40.00 $42.00 $52.00 None of the other answers are correct.

(Please correct answer for this question) Phoebe owns 200 shares in Optus Inc. Optus has 50 million shares outstanding that are trading at $3 each. Due to a liquidity crisis, Optus decides to place 15 million shares to a group of hedge funds at $2 each. How much money did Phoebe lose due to this private placement, based only on the information above? (round to the nearest 2 digits) Group of answer choices $46.00 $40.00 $42.00 $52.00 None of the other answers are correct.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 50P

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Phoebe owns 200 shares in Optus Inc. Optus has 50 million shares outstanding that are trading at $3 each. Due to a liquidity crisis, Optus decides to place 15 million shares to a group of hedge funds at $2 each. How much money did Phoebe lose due to this private placement, based only on the information above? (round to the nearest 2 digits) Group of answer choices $46.00 $40.00 $42.00 $52.00 None of the other answers are correct.
Joyce has never invested in shares before. She has come to you, as a prospective finance graduate, for some advice. In your conversations with Joyce, you have determined her Required Rate of Return (RRR) to be 8.75%. d) Joyce decided to buy 200 000 shares in GGG Ltd., giving her 2% ownership in the company (GGG Ltd. currently has 10 000 000 issued shares). One year later, GGG Ltd. announces a private placement of a further 10,000,000 shares, in order to raise funds for their new venture: Project COVID. (i) Describe two features of a private placement of shares. (ii) What is the major disadvantage to Joyce of the above private placement? Include in your answer the effect on her ownership. (iii) Identify one other source of equity funding Joyce, as a shareholder, would prefer. Justify your choice.
Lancaster Corporation, an investment banking company, often has extra cash to invest. Suppose Lancaster buys500 shares of Knight Corporation stock at $40 per share, representing less than 5% of Knight’soutstanding stock. Lancaster expects to hold the Knight stock for one month and then sell it.The purchase occurs on December 15, 2018. On December 31, the market price of one share ofKnight stock is $47 per share.Requirements1. What type of investment is this for Lancaster? Give the reason for your answer.2. Record Lancaster’s purchase of the Knight stock on December 15 and the adjustment tomarket value on December 31.3. Show how Lancaster would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018
If Sharon Jacobs of the previous problem (I have posted the previous problem below.) is also a founder of the company and has retained 8 million shares of its stock, how much of a difference will the auditor's decision make in her personal wealth outside of the stock option? Read Business Analysis Case 3. Henderson Industries Inc.'s stock is currently selling at $22.40 per share. Sharon Jacobs, the CEO, has options to buy 250,000 shares at $25.50 per share that expire at the end of the year. Sharon feels that if the traditional accounting method is used, implementing the deferred payment sales program will push the stock's price about halfway toward the level it was at two years ago which was about $43. (That method recognizes the entire price and cost of a sold item on the income statement at the time of sale.) If the installment sales technique is used, the price of the stock will probably be unchanged but may even go down a little. How much will Sharon make on her stock option i…
On April 29, 2017, Corey purchased 2,000 units in a Canadian mutual fund company for $13,000. On April 29, 2021, he sold 1,500 shares when they hit $29/share and incurred a large gain. He of course bragged about the gain but did not tell anyone about the capital loss of $5,000 that he also incurred on some other mutual funds sold earlier in the year in January 2021. His tax rate is 40%, how much tax will he pay on the sale of these investments
2. Naomi owns 1,000 shares of Nordstrom Corp. common stock which she purchased for $42400 and later receives a nontaxable preferred stock dividend of 200 shares of Nordstrom preferred stock when the FMV of the preferred was $60 per share and the FMV of the common was $48 per share. What is the basis of the preferred shares after the dividend? The answer is $32560 please explain how to calculate properly
BL Plastics is an all equity firm that has 27,000 shares of stock outstanding. The company has decided to borrow $46,080 to buy out the shares of a deceased stockholder who holds 600 shares. What is the total value of this firm if you ignore taxes?
Amherst Corporation, an investment banking company, often has extra cash to invest. Suppose Amherst buys900 shares of Hurricane Corporation stock at $57 per share, representing less than 5% ofHurricane’s outstanding stock. Amherst expects to hold the Hurricane stock for one month andthen sell it. The purchase occurs on December 15, 2018. On December 31, the market price of ashare of Hurricane stock is $58 per share.Requirements1. What type of investment is this for Amherst? Give the reason for your answer.2. Record Amherst’s purchase of the Hurricane stock on December 15 and the adjustment tomarket value on December 31.3. Show how Amherst would report this investment on its balance sheet at December 31 andany gain or loss on its income statement for the year ended December 31, 2018.
1. Naomi owns 1,000 shares of Nordstrom Corp. common stock which she purchased for $40700 and later receives a nontaxable preferred stock dividend of 200 shares of Nordstrom preferred stock when the FMV of the preferred was $80 per share and the FMV of the common was $64 per share. What is the basis of the common shares after the dividend? [For your answer, please use whole number (no need to round) and ignore the dollar sign and the comma.]
Consider three investors who need to partially liquidate investments to raise cash. In this case, all investments have been held for three or more years. Investor A waited for a $3,000qualified dividend distribution from her mutual fund, and Investor B received $3,000 in interest income from a certificate of deposit. However, because Investor C could not wait for a distribution, he decided to sell $3,000 of appreciated stock shares. Assuming no commissions, no sales charges, and no state income tax, and a 33 percent federal marginal tax bracket, which investment will provide the greatest after-tax amount? Assuming no commissions, no sales charges, or state income tax, and a 33 percent federal marginal tax bracket, the investments that will have the greatest after-tax amount belong to: (Select best answer below.) A. Investors A and B. B. Investors B and C. C. Investors A and C.
Howard holds 3,000 shares in Bean, a firm with a stock price of $30. Bean has announced a dividend of $1.50 per share that will go ex-dividend tomorrow. Howard doesn’t need cash and so he’d prefer not to have any dividend. Which of the following is closest to the action would you suggest for Howard immediately after the stock goes ex-dividend? Assume perfect markets. Select one: a. Buy 163.64 shares of Bean b. Sell 36,000 shares of Bean c. Buy 272.73 shares of Bean d. Buy 157.90 shares of Bean e. Buy 36,000 shares of Bean
Lara’s Inc. is currently an unlevered firm with 450,000 shares of stock outstanding, with a market price of $15 a share. The company has earnings before interest and taxes of $314,000. Lara's met with his bankers, Warne Incorporated and agreed to borrow $825,000, at 5 percent. You are an ardent investor and you currently own 20,000 shares of Lara's stock. If you seek to unlevered your position; how many shares of Lara's stock will you continue to own, if you can loan out funds at 5 percent interest? Ignore taxes in your deliberations. Kindly show all workings