1.The current price of a stock is $21. In 1 year, the price will be either $27 or $15. The annual risk-free rate is 6%. Find the price of a call option on the stock that has a strike price is of $23 and that expires in 1 year. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume 365-day year. Do not round your intermediate calculations.

2.The current price of a stock is $15. In 6 months, the price will be either $20 or $12. The annual risk-free rate is 3%. Find the price of a call option on the stock that has a strike price of $13 and that expires in 6 months. (Hint: Use daily compounding.) Round your answer to the nearest cent. Assume a 365-day year. Do not round your intermediate calculations.

As an Optional Challenge problem: create a balance sheet at end of year 8 on the accrual basis of accounting. Remember that for each event above, asset entries must equal entries for liabilities and stockholders’ equity (A = L + E).

An investor buys some shares of ABC for $20 at the beginning of the year. During the year he receives $0.50 in dividends, and then sells the shares for $21 at the end of the year. What is the total return on this investment?

You purchased shares in Home Depot at the beginning of the year for $55 a share. Home Depot paid a $3 dividend throughout the year, and its share price ended the year at $50. If inflation that year was 3%, what was the real holding-period return for the year?

Multiple Choice

-6.44%

-6.36%

-11.74%

-3.64%

By the end of this year you would be 35 years old and you want to plan for your retirement. You wish to retire at the age of 65 and you expect to live 20 years after retirement. Upon retirement you wish to have an annual sum of $50,000 to supplement your social security benefits. Therefore, you opened now your retirement account with 7% annual interest rate. At retirement you liquidate your account and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments based on a 6 % coupon rate, throughout your retirement years.

Please calculate the monthly payment in your retirement account in order to be able to achieve the plan mentioned above?

Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co.

1. Issued 192,000 shares of $4-par-value common stock for $768,000 in cash.
2. Borrowed $530,000 from Oglesby National Bank and signed a 11% note due in three years.
3. Incurred and paid $380,000 in salaries for the year.
4. Purchased $640,000 of merchandise inventory on account during the year.
5. Sold inventory costing $590,000 for a total of $920,000, all on credit.
6. Paid rent of $110,000 on the sales facilities during the first 11 months of the year.
7. Purchased $180,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days.
8. Paid the entire $129,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded.
9. Incurred and paid utilities expense of $34,000 during the year.
10. Collected $855,000 in cash from customers during the year for credit sales previously recorded.
11. At year-end, accrued $58,300 of interest on the note due to Oglesby National Bank.
12. At year-end, accrued $10,000 of past-due December rent on the sales facilities.

Required:
a. Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year. (Hint: You may find it helpful to prepare a T-account for the Cash account since it is affected by most of the transactions.)

The cost data for Evencoat Paint for the year 2019 is as follows:

A. Using the high-low method, express the company’s maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs.

Fixed cost $ 60,000

Variable cost $

Need help with variable cost.

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the course of the year. (Use the 2019 tax rate schedules.)

a. What is Marc and Michelle’s gross income? 76,500

b. What is Marc and Michelle’s adjusted gross income? 72,500

c. What is the total amount of Marc and Michelle’s deductions from AGI?

d. What is Marc and Michelle’s taxable income?

e. What is Marc and Michelle’s taxes payable or refund due for the year?

Sales on account for the first two months of the current year are budgeted as follows.

All sales are made on terms of 2/10, n/30 (2 percent discount if paid in 10 days, full amount by 30 days); collections on accounts receivable are typically made as follows.

Compute the estimated cash collections on accounts receivable for the month of February.

A corporation that has paid the lesser of their current year tax liability or their prior yerar liability may be subject to an underpayment penalty if their total tax liability is equal to or greater than