Entries by John

Interpret the ratios of Best Computer and draw inferences about the company”s financial performance and financial condition—ignore the industry ratios.

June 24, 2019 in /by

The Tristar Mutual Fund manager is considering an investment in the stock of Best Computer and asks for your opinion regarding the company. Best Computer is a computer hardware sales and service company. Approximately 50% of the company”s revenues come from the sale of computer hardware. The rest of the company”s revenues come from hardware […]

Consider the following two statements: “Dividend policy is irrelevant,” and “Stock price is the present value of expected future dividends.”

June 24, 2019 in /by

Consider the following two statements: “Dividend policy is irrelevant,” and “Stock price is the present value of expected future dividends.” (See Chapter 4.) They sound contradictory. This question is designed to show that they are fully consistent. Merck International Paper Year EPS Dividend EPS Dividend 1983 0.17 0.08 1.16 0.6 1984 0.19 0.09 0.47 0.6 […]

Bond value

June 24, 2019 in /by

1 Problem 10-2 Bond value [LO3] Applied Software has $1,000 par value bonds outstanding at 20 percent interest. The bonds will mature in 15 years. Use Appendix B and Appendix D. Compute the current price of the bonds if the present yield to maturity is (Round “PV Factor” to 3 decimal places, intermediate and final […]

Reorganization Entries and Balance Sheet

June 24, 2019 in /by

Reorganization Entries and Balance Sheet On September 30, 2008, SRP Company filed a petition for reorganization with a bankruptcy court. The plan was approved by the court and all parties of interest on January 2, 2009, when SRP Company’s balance sheet was as follows: SRP Company Balance Sheet January 2, 2009 Cash $32,000 Accounts receivable […]