In March 2020, Snow Fun, Inc., made a rights issue at a subscription price of $10 a share. One new share can be purchased for every 3 shares held. Before the issue, there were 12 million shares outstanding, and the share price was $15.
(1) What is the total amount of new money raised?
(2) What is the expected stock price after the rights are issued? Why is the stock price expected to fall after the right issue?
(3) Suppose that the company had decided to issue the new stock at $8 instead of $10 a share, how many new shares would it have needed to raise the same sum of money? Show that Snow Fun’s shareholders are just as well off if it issues the shares at $8 a share rather than $10.
In: Finance
In March 2020, Snow Fun, Inc., made a rights issue at a subscription price of $10 a share. One new share can be purchased for every 3 shares held. Before the issue, there were 12 million shares outstanding, and the share price was $15.
(1) What is the total amount of new money raised?
(2) What is the expected stock price after the rights are issued? Why is the stock price expected to fall after the right issue?
(3) Suppose that the company had decided to issue the new stock at $8 instead of $10 a share, how many new shares would it have needed to raise the same sum of money? Show that Snow Fun’s shareholders are just as well off if it issues the shares at $8 a share rather than $10.
In: Finance
In March 2020, Snow Fun, Inc., made a rights issue at a subscription price of $10 a share. One new share can be purchased for every 3 shares held. Before the issue, there were 12 million shares outstanding, and the share price was $15.
(1) What is the total amount of new money raised?
(2) What is the expected stock price after the rights are issued? Why is the stock price expected to fall after the right issue?
(3) Suppose that the company had decided to issue the new stock at $8 instead of $10 a share, how many new shares would it have needed to raise the same sum of money? Show that Snow Fun’s shareholders are just as well off if it issues the shares at $8 a share rather than $10.
In: Finance
The generativity of digital platforms and ecosystems enables opportunities for distribution innovation. Discuss what platform owners should do to mobilise digital resources and leverage the innovation potential of multiple actors in the digital ecosystem.
In: Economics
Research standardization, flexibility and innovation in product/process design. How does this information apply to 3M, an innovative company with a variety of products? You will need to provide proof of 3M’s innovation, flexibility, and/or standardization.
In: Operations Management
In: Economics
Problem ABC is a young starup company. Currently, they do not pay dividends. The first scheduled dividend will be paid at the end of year 3, with amount of $1.50. In the next 4 years, the dividend will grow at 20% every year. After that, it will maintain a sustainable growth rate of 6% forever. The required rate of return is 15%. John hired you as an excel programmer. He asks you to write only one flexible excel program that has all of the following requirements respect to the change of input data: a) The amount of stock price must be shown at “answer section” ( 1 point) b) Please use IF function to develop a fexible model displaying the stock price and dividend for this model.
In: Finance
Innovations in technology have impacted every aspect of health care from the way in which patients seek their providers to how organizations market themselves, and the way claims are submitted to insurance companies for payment. Many of the nonclinical innovations focus on data collection and using the data for meaningful purposes including billing and revenue cycle.
For this discussion, identify a technological innovation such as electronic health record, billing software, or estimator tool and address the following:
In: Finance
Bonita Company purchased machinery on January 1, 2020, for $87,200. The machinery is estimated to have a salvage value of $8,720 after a useful life of 8 years.
Compute 2020 depreciation expense using the
double-declining-balance method.
Compute 2020 depreciation expense using the
double-declining-method method assuming the machinery was purchased
on September 1, 2020.
In: Accounting
PART A
Your line manager, Ahmed, has sent you the following email late on Wednesday just as you are about to finalise your timesheet and head to a monthly tax-update webinar:
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From: Ahmed Sent: Wednesday, 16 September 2020, 3:58PM Subject: URGENT: Lisa Eastwood meeting scheduled, task assigned Good afternoon, I have just spoken with Lisa Eastwood (new client) over her tax position for the current tax year. I will be getting further documentation tomorrow; however, I need you to examine my notes below and determine the tax consequences arising from her various activities. Lisa has recently moved to Melbourne from Darwin, after being appointed as Regional Manager at the company, Dial Before You Dig. Lisa’s Darwin Home Lisa sold her home in Darwin (contract date September 2019, settlement December 2019), receiving $1,220,000 at settlement. This is after legal fees ($12,000), advertising ($2,000) and real estate commissions ($25,000) were deducted.
Sculpture Lisa gave a sculpture, valued at $18,900, to her friend in June 2020. The sculpture was purchased for $480 in December 2000 and repaired in March 2016 for $1,250. Vase When Lisa was playing with her cat in September 2019, the cat accidentally knocked over and broke a vase given to her by her grandmother in September 2018 (worth $6,100 at that time). The vase dated back to the Australian gold rush (circa 1850's) and, after undertaking some research, she discovered it was currently worth approximately $27,000. Lisa did not have insurance for the item. Cryptocurrency Lisa converted cryptocurrency into $27,200 Australian dollars in October 2019. To complete the transaction, she incurred $950 in transaction fees. Therefore, Lisa received $26,250 in cash. Lisa had acquired the cryptocurrency in September 2018 for $9,200 Australian dollars. Shares Lisa sold shares she held in a construction company in March 2020 for $182,000. She had purchased the shares for $37,200 in December 1986. Lisa has indicated that she has carried forward losses from prior years of $180,000 relating to a prior disposal of shares and land. We will have a meeting first thing Monday morning, so please complete your analysis by the end of Friday so I can review her circumstances over the weekend. Regards, Ahmed. Senior Accountant M&M Tax Accountants |
Required: You are required to calculate Lisa’s Net Capital Gain (loss) for the year ending 30 June 2020 based on the above information provided. In doing so, you must present an accurate and complete analysis.
Question 6
A.6 Determine the Net Capital Gain and/or Loss for Lisa. Briefly justify your answer/show all workings.
Hint: it is recommended you use a table format to present your answer.
In: Accounting