Question
In: Finance
John holds 100 shares of stock with a total basis of $1000. He receives a 25%...
John holds 100 shares of stock with a total basis of $1000. He receives a 25% stock dividend at the end of year 1.
In year two, he sales 30 of his shares when the stock price is $15.00 per share. Please calculate his gain in year two.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Larry Nelson holds 1,000 shares of General Electric common stock. As a shareholder, he has the...
Larry Nelson holds 1,000 shares of General Electric common
stock. As a shareholder, he has the right to be involved in the
election of its directors. These directors are responsible for
managing the company and achieving the company’s objectives.
True or False: Larry can invest in another company that is
selling class A shares to the public, and class B shares will be
retained by company insiders. This will help the founders maintain
control in the company.
True
False
Larry...
You own 100 shares of stock of unlevered Gamma Company which has 1000 shares outstanding. Gamma...
You own 100 shares of stock of unlevered Gamma Company which has
1000 shares outstanding. Gamma plans to pay $2,200 dividend at the
end of the current year (i.e. one year from today) and a
liquidating dividend of $4,840 at the end of 2 years from today.
The required return on Gamma’s stock is 10 percent. Ignoring taxes,
and transaction costs.
a. What is the value of your shares of
stock? Show calculations to support your answer.
b. Suppose shareholders...
You own 100 shares of stock of unlevered Gamma Company which has 1000 shares outstanding. Gamma...
You own 100 shares of stock of unlevered Gamma Company which has
1000 shares outstanding. Gamma plans to pay $2,200 dividend at the
end of the current year (i.e. one year from today) and a
liquidating dividend of $4,840 at the end of 2 years from today.
The required return on Gamma’s stock is 10 percent. Ignoring taxes,
and transaction costs.
a. What is the value of your shares of
stock? Show calculations to support your answer.
b. Suppose shareholders...
You own 100 shares of stock of unlevered Gamma Company which has 1000 shares outstanding. Gamma...
You own 100 shares of stock of unlevered Gamma Company which has
1000 shares outstanding. Gamma plans to pay $2,200 dividend at the
end of the current year (i.e. one year from today) and a
liquidating dividend of $4,840 at the end of 2 years from today.
The required return on Gamma’s stock is 10 percent. Ignoring taxes,
and transaction costs.
a. What is the value of your shares of stock? Show calculations
to support your answer.
b. Suppose shareholders...
Paul now owns 500 shares of Martin Inc with a stock basis of $50,000. The total...
Paul now owns 500 shares of Martin Inc with a stock basis of
$50,000. The total outstanding shares of Martin Inc are 1,000. Of
the remaining 500 shares, 50 shares are owned by Mike (son), and
the remaining 450 shares of Martin Inc are owned by an unrelated
shareholder. Martin Inc has E&P of $640,000.
a. What are the tax
consequences to Paul if in a stock redemption; Martin Inc redeems
100 shares from Paul for $30,000?
b. What are...
Myles Houck holds 500 shares of Lubbock Gas and Light. He bought the stock several years...
Myles Houck holds
500
shares of Lubbock Gas and Light. He bought the stock several
years ago at
$ 47.91
and the shares are now trading at
$ 75.50
Myles is concerned that the market is beginning to soften. He
doesn't want to sell the stock, but he would like to be able to
protect the profit he's made. He decides to hedge his position by
buying
5
puts on Lubbock G&L. The 3-month puts carry a strike price
of...
Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, he has...
Larry Nelson holds 1,000 shares of General Electric (GE) common
stock. As a stockholder, he has the right to be involved in the
election of its directors, who are responsible for managing the
company and achieving the company’s objectives.
True or False: Larry can vote in person at the company’s annual
meeting, through the mail, or by transferring the right to vote to
another person by means of proxy.
Larry also holds 2,000 shares of common stock in a company...
Myles Houck holds 700 shares of Lubbock Gas and Light. He bought the stock several years...
Myles Houck holds 700 shares of Lubbock Gas and Light. He bought
the stock several years ago at 47.49, and the shares are now
trading at $75.00 Myles is concerned that the market is beginning
to soften. He doesn't want to sell the stock, but he would like to
be able to protect the profit he's made. He decides to hedge his
position by buying 7 puts on Lubbock G&L. The 3-month puts
carry a strike price of $75.00 and...
1. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. He...
1.
John buys shares of stock in Acme Corp. on January 1, 2018 for $50.
He gifts the stock to Mary on July 1, 2018 when the stock has a
fair market value (fmv) of $60. Mary sells the stock on September 1
, 2018 for $80.
a.
What is the gain /loss recognized by
John? ______________
What is the character of the gain/loss? _____________
b.
What is the gain /loss recognized by Mary?
______________
What...
John purchased 100 shares of Black Forest Inc. stock at a price of $151.53 three months...
John purchased 100 shares of Black Forest Inc. stock at a
price of $151.53 three months ago. He sold all stocks today for
$155.40. During this period the stock paid dividends of $4.80 per
share. What is John’s annualized holding period return (annual
percentage rate)?
Round the answers to two decimal places in percentage form.
(Write the percentage sign in the "units" box)
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