Ohio Inc. has a global beta of 1.6 and its​ debt-to-equity ratio is 0.6. The​ risk-free rate is​ 3.2% and the expected global market risk premium is​ 9%. Although Ohio is a US​ firm, it issued Swiss Franc​ (SF) denominated bond and converted SF to US dollar. The​ semi-annual interest payment is made in SF. The coupon rate is​ 8%, the price of the bond is​ SF1020, the face value is​ SF1,000, and the bond matures in 15 years. The exchange rate is expected to move from​ SF0.9400/$ to​ SF0.9200/$. ​ Ohio’s tax rate is​ 40%.

a.​ What’s Ohio’s SF cost of​ debt? ​____________________

b.​ What’s your best estimate of​ Ohio’s US dollar cost of​ debt? ​______

c.​ What’s Ohio’s cost of​ equity? ​____​______________

d.​ What’s Ohio’s​ WACC? ​___________________

Answer to the questions based on your knowledge about positive psychology and happiness theory (PERMA-model; P+E+M) plus the character strengths model.

As people living in the UAE we are very fortunate to live a safe life. We regularly however, hear and see human tragedies unfold around us, which have the capacity to significantly move us. Unfortunately, often society moves too fast to allow us to mindfully reflect and remember those who are suffering. What would happen if we donated some of our time and prayers for those in need?

• Explain the benefits from such a practice – how would it enhance subjective feelings of wellbeing. Your answer should be based on knowledge about PERMA model and character strengths.

1. Inge Brothers Inc. had the following items in its capital structure at December 31, 2019: Preferred stock, 10%, $8 par value, convertible into 46,200 common shares no earlier than 2020, issued at par value on July 1, 2019 (current market value, $8 per share).................................................................... $1,660,000

Common stock, $20 stated value, issued January 2, 2016 (current market value, $17 per share).................................................................. 1,200,000

Treasury stock, common, 10,000 shares, acquired on November 30, 2018........ 280,000

Common stock options, issued in 2016, exercisable for 22,000 shares, beginning in 2021, at a “strike” price of $15 per share. The cash that would be received from the option-holders from a hypothetical exercise of the options at December 31, 2019 would be sufficient for Inge Brothers to acquire 8,800 shares of its own common stock (as treasury stock).

Stock warrants outstanding, issued in exchange for legal services at June 30, 2019, convertible into 9,800 shares of common stock at the discretion of the warrant-holders, but not earlier than 2022. The hypothetical conversion of the warrants at December 31, 2019 would require a cash payment from the warrant-holders, which would be sufficient for Inge Brothers to acquire 5,440 shares of its own common stock (as treasury stock) .................... 220,000

Additional paid-in-capital.................................................................................... 760,000

Retained earnings................................................................................................ 460,000

Inge Brothers’ net income for 2019 was $553,000. As of December 31, 2019, the company’s Board of Directors had not yet declared the dividend for 2019 for the preferred shareholders. What earnings per share would Inge Brothers Inc. report for the year ended December 31, 2019? Prepare a schedule to support your answer.

You work as an analyst for an institution located in Riyadh, Kingdom of Saudi Arabia (or KSA).

The Saudi Arabia’s Monetary Authority, KSA’s Central Bank, has recently released a report on the regulation of the quantity of money in the country for the upcoming Year 2021.

In answering the questions that follow: show all relevant formulas and calculations. Keep two decimal points.   

As part of the report, Saudi’s Central Bank created a reference value for money growth between 2020 and 2021, according to which they expect real growth to stay between -4.2% and -6.3%, inflation rate to be between 3.9% and 5.8%, and velocity growth to range between -1.8% and -3.1%.

Using the averages for the figures provided above, calculate KSA’s estimated money growth rate. (2 points)

Suppose that the Central Bank’s report also states that between 2019 and 2020, due to the anticipated inflation in the MENA region brought on by 2020, the Saudi Arabian Monetary Authority is planning to DECREASE the country’s ‘M2’ from SR 230 billion to SR 205 billion (SR = Saudi Riyal).

According to the report, between 2020 and 2021, the KSA’s measure of velocity is expected to stay constant at 3.25.  

Using the Quantity Theory of Money, calculate the percentage change in the KSA’s nominal GDP. (1.5 points)

*** Note: Question 4(b) is not related to Question 4(a).   

The report states that, due to the anticipated deflation in the MENA region brought on by EXPO 2020, between 2020 and 2021, the Saudi Consumer Price Index is expected to DECREASE from 185 to 155.

Using Fisher’s Equation, determine the impact of this change on the level of the nation’s real GDP. (1.5 points)

*** Note: Question 4(c) is a continuation from Question 4(b) and is not related to Question 4(a).

BECN 250 – Money and Banking – Formulas

CPI = Cost of Basket in Current YearCost of Basket in Base Year × 100%

GDP deflator= Nominal GDPReal GDP

Inflation rate 1= New CPI - Old CPIOld CPI ×100% = New Cost of Basket - Old Cost of BasketOld Cost of Basket × 100%

Percentage change = New - OldOld ×100%

% Δ M + % Δ V = % Δ P + % Δ Y = % Δ Nominal GDP   

Money growth + Velocity growth = Inflation + Real growth

Warren Buffett, the billionaire investor and chairman/CEO of Berkshire Hathaway, stated that "diversification is protection against ignorance”. Do you agree with his statement? Why or Why not?

You are a CEO of a healthcare organization. What factors should you consider when developing a consistent HIT strategy. Please answer this question in 200 words or less.

1. Discuss one fringe benefit. Is it taxable? If so, how is it taxed? What type of employee would get these benefits (i.e. CEO, CPA, Administrative Assistant)?

Hello,

I have an accounting question

Pronghorn Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Pronghorn Inc. follows IFRS.

The tax rates were all enacted by the beginning of 2020.

Prepare the journal entries for the years 2020 to 2023 to record income taxes, assuming the tax loss is first carried back and that at the end of each year, the loss carryforward benefits are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Date

Date

Date

(To record benefit from loss carryback.)

Date