• X Enterprises has an investment in 25,000 shares of Y Electronics that X accounts for as a security available for sale. Y shares are publicly traded on the New York Stock Exchange, and the Wall Street Journal quotes a price for those shares of $10/share, but X believes the market has not appreciated the full value of the Y shares and that a more accurate price is $12/share. X should carry the Y investment on its balance sheet at: O $300,000. O $250,000. O either $250,000 or $300,000, as either are defensible valuations. O $275,000, the midpoint of X's range of reasonably likely valuations of Y.
• X Enterprises has an investment in 25,000 shares of Y Electronics that X accounts for as a security available for sale. Y shares are publicly traded on the New York Stock Exchange, and the Wall Street Journal quotes a price for those shares of $10/share, but X believes the market has not appreciated the full value of the Y shares and that a more accurate price is $12/share. X should carry the Y investment on its balance sheet at: O $300,000. O $250,000. O either $250,000 or $300,000, as either are defensible valuations. O $275,000, the midpoint of X's range of reasonably likely valuations of Y.
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 12P
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