Which of the following scenario not demonstrate significant influence? Yijin Co. who owns 30% of the convertible preference shares of HeeDo Co. GHI Co. who owns 15% of the voting shares of JKL Co. ABC Co. who owns 30% of the voting shares of DEF Co. a. I only b. II only c. III only d. I and II
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Which of the following scenario not demonstrate significant influence?
-
- Yijin Co. who owns 30% of the convertible
preference shares of HeeDo Co. - GHI Co. who owns 15% of the voting shares of JKL Co.
- ABC Co. who owns 30% of the voting shares of DEF Co.
- Yijin Co. who owns 30% of the convertible
a. I only
b. II only
c. III only
d. I and II
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Solved in 2 steps
- Given that firms can issue multiple share classes of common stock, which of the following is INCORRECT? Select one: a. The cash flow rights of each share class must be identical. b. All of the share classes must be publicly traded. c. Each share class can only elect directors for their share class. d. Firms cannot restrict the ownership of share classes. e. All of the above answers are incorrect about dual class firms. The LMN Corporation had Net Operating Working Capital in 2019 of $1,200 and $1,400 in 2020. LMN has EBIT of $3,000, Depreciation and Amortization of $450, and Capital Expenditures of $600. If LMN has a corporate tax rate of 21%, what is the free cash flow for the firm? Select one: a. Less than $500 b. Between $500 and $650 c. Between $650 and $800 d. Between $800 and $950 e. Greater than $950 The RQP corporation is looking to reduce their cost of capital. In calculating the return on equity for the firm, the firm uses CAPM. Which of the following events would…Walter Corporation has three classes of shares: Series A, Series B, and Class A. How should Walter classify and present the different classes if the characteristics of each class are as follows? Series A shares The shares are mandatorily redeemable and carry a dividend rate of 4%. Series B shares The shares are cumulative, non-voting, and carry a dividend rate of $2 per share. They are subordinated to the Series A shares for dividend distribution. Class A shares The shares are subordinated to both Series A and Series B shares for dividend distribution and participate in the earnings and losses of the company above a non-cumulative dividend of $0.50 per share. The shares have a voting right of one vote per share.Wixi Co. has the following equity investments in FSN, DELL, and ATI. (1) Which of these companies are subsidiaries of Wixi? (2) How are individual assets and liabilities of a parent and its subsidiary(ies) reported on a balance sheet? FSN stock: Wixi owns 70% of the voting common stock and has controlling influence. DELL stock: Wixi owns 5% of the voting common stock and has insignificant influence. ATI stock: Wixi owns 30% of the voting common stock and has significant influence.
- P Ltd owns 55% of the shares of S Ltd. Each share entitles the holder to one vote at the AGM.The decisions made at the AGM direct the relevant activities of S Ltd.Identify the correct statement(s) regarding control.(i) P Ltd holds the majority of the voting rights at the AGM.(ii) P ltd has the ability to use its majority voting rights at the AGM to affect its returns.(iii) P Ltd is not exposed to variable returns from S Ltd through dividends and the value of investment in S Ltd.(iv) P Ltd has control over S Ltd and S Ltd is a subsidiary of P Ltd.Select one:a.(i), (ii) and (iii)b.(i) and (iv)c.(i), (iii) and (iv)d.(i), (ii) and (iv)Panca Corporation is the parent company of Sekawan Corporation, with 90% of ownership. The following data is available for 2019: Sekawan's preferred stock is cumulative and convertible into 21,000 shares of Panca common stock and Panca and Sekawan do not have any other potentially dilutive securities outstanding. Required:a. Panca's basic EPSb. Panca’s diluted EPSRequired: 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?
- Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousands of shareholders, each hold less than 1% of the voting rights. None of the shareholders has contractual arrangement to consult any of the others or make collective decisions. Which of the following is true regarding the above situation? (Select the best answer) Group of answer choices A.Prosperity does not power over MNO because it holds only protective right. B.Prosperity has power over MNO Co. because Prosperity owns the highest percentage of shares. C.The 40% interest above is presumed to have a de-facto control over MNO Co. because of the relative dispersion of other shares. D.Prosperity does not have power over MNO Co. because its holding is not sufficient rights to give power.Magic Eco Limited (Ltd) is listed on the Johannesburg Stock Exchange (JSE), it has two classes of shares class X and Y class. The shares have the following rights:„h Holders of class X are entitled to a fixed dividend per share and have the right to participate in any additional dividends declared. Dividends are discretionary.„h Holders of class Y participate equally with the holders of class X with respect to any additional discretionary dividend only.„h Both classes of shares participate equally in residual assets on winding up.Additional information1. Net profit for Magic Eco for the period is R2 5002. Dividends paid to Class X holders amounted to R 6003. Dividends paid to holders of Class Y holders amounted to R 5004. Number of shares outstanding for the period are 100 Class X and 100 Y shares.Required1. Determine the nature of the Class Y and Class X shares, give reasons for your thought process. 1. Calculate the Earnings per share for the Ordinary shares.The Daddy Group has the following group structure:Daddy Ltd80% 80% 27%Son 1 Ltd Son 2 Ltd Son 3 Ltd70% 55%30 %Son 4 Ltd Son 5 Ltd10% 5% 45% 95%Son 6 Ltd Son 7 Ltd(a) Reproduce and complete the following controlling and non-controlling interest table. Show your calculations.(b) What percentage of the voting in Son 7 Ltd will be controlled by the Daddy Ltd? (c) What percentage of the dividend declared by Son 7 Ltd will be received by the Daddy Ltd? Daddy Interest
- The Daddy Group has the following group structure: Daddy Ltd 80% 80% 27% Son 1 Ltd Son 2 Ltd Son 3 Ltd 70% 55% 30 % Son 4 Ltd Son 5 Ltd 10% 5% 45% 95% Son 6 Ltd Son 7 Ltd (a) Reproduce and complete the following controlling and non-controlling interest table. Show your calculations. (b).What percentage of the voting in Son 7 Ltd will be controlled by the Daddy Ltd? (c). What percentage of the dividend declared by Son 7 Ltd will be received by the Daddy Ltd? Daddy Interest Son 1 Son 4 Son 2 Son 5 Son 7 Son 6 Son 3 Direct % Indirect % Non-controlling Interest Direct % Indirect % Total Show all the workings of calculationsThe Daddy Group has the following group structure:Daddy Ltd80% 80%27%Son 1 Ltd Son 2 Ltd Son 3 Ltd70% 55%30 %Son 4 Ltd Son 5 Ltd10% 5% 45% 95%Son 6 Ltd Son 7 Ltd(a) Reproduce and complete the following controlling and non-controlling interest table. Show your calculations. (b) What percentage of voting in Son 7 Ltd will be controlled by Daddy Lt(c) What percentage of the dividend declared by Son 7 Ltd will be received by Daddy Ltd?ABC Inc. holds 17% of the common shares of XYZ Ltd. ABC is able to appoint three members of XYZ’s 12-member Board of Directors. ABC is also a supplier of raw materials to XYZ. XYZ is a private company and the remaining 83% of XYZ’s common shares are widely held. Assume that ABC reports under ASPE, what are the reporting options for its investment in XYZ? A. Equity method B. Equity method or costC. Equity method, cost, or consolidation D. Fair value through profit or loss (FVTPL) or cost.
