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# Options

### Picking Stocks to Invest

I need to choose 2 stocks from the following: Coca Cola Exxon/Mobil General Electric Pepsi Cola (Pepsico Inc) Proctor and Gamble General Motor Explain the choice of companies What did you see that made them seem more attractive to your hard-earned money? What made them better than the others? What does the stock mark

### Record stock dividends, splits, diluted EPS (convertible preferred or bonds)

How do you record stock dividends? What about stock splits - how do you record them? Suppose we have dilutive securities, how do we handle them when computing diluted earnings per share? Suppose we have convertible preferred stock? How would we compute diluted earnings per share? Suppose we have convertible bonds? How w

### Fondren Exploration: Compute diluted EPS; Worldwide Scientific merger; GM merger

Please respond in a word document format. 1. Fondren Exploration, Ltd., has 1,000 convertible bonds (\$1,000 par value) outstanding, each of which may be converted to 50 shares. The \$1 million worth of bonds has 25 years to maturity. The current price of the stock is \$26 per share. The firm's net income in the most recent fis

### Durkin's ability to pick stocks consistent with market efficiency

The Durkin Investing Agency has been the best stock picker in the country for the past two years, Before this rise to fame occurred, the Durkin newsletter has 200 subscribers. Those subscribers beat the market consistently, earning substantially higher returns after adjustment for risk and transaction costs. Subscriptions hav

### Variables Affecting Option Price

Applying the following matrix, state whether the variable would increase or decrease the value of the call or put, keeping all other variables constant. Arrows imply increasing or decreasing the value of the variable. DISCUSS YOUR REASONING FOR EACH VARIABLE. Variable Call Value Put Value Stock price (&#8593;)

### Calculate portfolio weights given data on two stocks

A stock has a beta of 1.56 and an expected return of 17.3 percent. A risk free asset currently earns 5.1 percent. If a portfolio of the two assets has a beta of 1.06 what are the portfolio weights?

### Conversion ratio for bonds; Ex-dividend date

1. What is the conversion ratio for each of the following bonds? a.) A \$1,000 par-value bond that is convertible into common stock at \$43.75 per share. b.) A \$1,000 par value bond that is convertible into common stock at \$25.00 per share. 2. Morris wishes to purchase shares of Deb, Inc. The company's board of direct

### Logic of Hedging: Sam Crawford at Morrison Oil Company

Please use Excel attachment to solve problem. Morrison Oil Company's chief financial analyst is Samuel Crawford. Sam completed his analysis suggesting that the investment was indeed a good one for the company and presented it to the firm's executive committee. The executive committee consists of the firm's CEO, CFO, and COO.

### SmartMoney: Investments That Crank Out Cash - WSJ.com

Review the following article from the Wall Street journal: SmartMoney: Investments That Crank Out Cash - WSJ.com http://online.wsj.com/article/SB10001424052748703615104575329132724496468.html?KEYWORDS=investing+overseas Requirements: 2 references Structure of the paper: Abstract Article Review Opinion/Analysis R

### Dealing with Foreign Exchange Rates: Blades Inc. Case

Blades, Inc., needs to order supplies two months ahead of the delivery date. It is considering an order from a Japanese supplier that requires a payment of 12.5 million yen payable as of the delivery date. Blades has two choices: 1. Purchase two call option contracts (since each option contract represents 6,250,000 yen). 2.

### Dee Trader Brokerage Accounts

1. Dee Trader opens a brokerage account, and purchases 300 shares of Internet Dreams at \$40 per share. She borrow \$4,000 from the broker to help pay for the purchase. The interest rate on the loan is 8%. a. What is the margin in Deeâ??s account when she first purchases the stock? b. If the share price falls to \$30 per share b

### Pricing Options on Binomial Tree

I'm trying to answer the questions about the two period binomial tree pasted here. Thanks for your help!! Pricing options on binomial tree: Consider a two-period binomial example where the underlying asset's price movements are modeled over the next two months, each period corresponding to one month. The current level of the

### Tax & Earnings per Share for Northern and Poland Corporation

A. Northern Corporation purchased a fixed asset for \$20 million. At 12-31-08, the carrying value of the asset was \$17 million and its tax basis was \$12 million. On 12-31-09, the carrying value was \$16 million and the tax basis was \$9 million. Northern also reported \$2 million in unearned income, \$3 in prepaid expenses, and \$1 m

### Walker Company Convertible securities: Compute diluted earnings per share

A template has been attached. Walker Company has 15,00 shares of common stock outstanding during all of 2010. It also has two converible securties outstanding at the end of 2010. These are: 1. convertible perferred stock :1,000 shares of 9%, \$100 par, preferred stock were issued in 2009 for \$140 per share. Each shar

### Business Ethics Week 6 Discussion Question Help - Marketing in Schools

Read the Decision Point titled â??Marketing in Schoolsâ? on page 339 of the text. There are six questions at the end of the excerpt. Select three of them to answer in detail. Please remember to state the question you are answering prior to replying to it. Need help writing a 200-300 word essay in APA format. Have attache

### Liabilities and Owner's equity

1. Discuss the difficulties in accounting for estimated liabilities. Does accounting for estimated liabilities create problems or opportunities for financial statement prepares? Explain. 2. Define what is meant by contingent liability? Why do contingent liabilities create such difficult problems for financial statement users

### Global Financial Stability

Discuss Global Financial Stability o Balance of payments o Countertrade o Eurocurrency market o Foreign exchange rates o International banking facilities o London Interbank Offered Rate o International Banking Act of 1978 · Explain how the topic you chose relates to the

### US Firm will hedge Canadian receivables: Forward contract or Put option

A U.S. firm wishes to hedge Canadian dollar receivables. The firm can enter a forward contract to sell 100,000 Canadian dollars in one year at a rate of F(US\$/C\$)=0.80. One year from now, the spot price of the Canadian dollar is 0.83. A) Calculate the U.S. dollars received by the firm (i) if the receivables are hedged with a

### study questions

35. The lease analysis should compare the cost of leasing to the a. Cost of owning using debt. b. Cost of owning using equity. c. After-tax cost of debt to measure the effect of leasing on the cost of equity. d. Average cost of all fixed charges. e. Cost of owning using the weighted average cost of capital for the firm.

### Summarize the concept of investing in stocks including performance and risk analysis

Summarize the concept of investing in stocks. Include a definition of what kind of investment the purchase of a stock is, how stocks are bought and sold in primary and secondary markets, what determines prices, and what type of investors are best suited for stock market investing. Be sure to include a description of how the stoc

### ACC 423

Please show all calculations. Please and thank you. I will go over it with the one I have. Please complete the following problems and show all calculations. Please and thank you! 1. Sands Corp has the following capital structure at the beginning of the year: 6% preferred stock, \$50 par value, 20,000 shares authorized,

### Profits and losses from Straddles: Determine the potential profits and losses from various positions, developing profit profiles at various stock prices by filling in this chart for each position.

A company is the target of a hostile takeover. Prior to the announcement of the offer to purchase the stock for \$72 a share, the stock had been selling for \$59. Right after the offer, the stock rose to \$75, a premium over the offer prices. Such premiums ar often indicative that investors expect a higher price to be forthcoming.

### Express Scripts: Six Derivative problems on options: volatility, risk free rate, risk-neutral pricing, hedging, straddle

1. Gather the following information regarding Express Scripts: ? The current stock price. ? Ask price for a January 2011 call option with exercise price of \$90 ? Historical volatility ? Current risk-free interest rate 2. Based on risk-neutral pricing compute the probability that Express Scripts' price will be in between \$

### 1) Consider a portfolio consisting of a long TM stock and a long put (K = \$70). a. Graph the profits to the position as a function of stock price. b. How might you create a similar payoff structure using a call option? Based on a comparison of these two positions, are the options priced correctly?

Answer questions 1 - 3 based on the information below. Assume r = 4% and no dividends. Toyota Motor Corporation (TM) - Stock Price 77.70 Options expiring in one year K Call Put 70 12.2 5.8 80 7.2 10.5 90 3.7 17.6 1) Consider a portfo

### Issuance and Conversion of Bonds entries for Grand

Issuance and Conversion of Bonds For each of the unrelated transactions described below, present the entry(ies) required to record each transaction. 1. Grand Corp. issued \$20,000,000 par value 10% convertible bonds at 99. If the bonds had not been convertible, the company's investment banker estimates they would have been

### Multiple choice questions (sample Business Analysis quiz): preferred stock, securities, cash dividends and more...

Can you help me get started on this assignment? 1. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means

### Construct and support an Argument on Health care

Need help with a paper on sonstructing and supporting a argument on Health Care.

### There are times when a company would want to reduce bond indebtness, a creditor would want to grant concessions and reconize an imparement.

# 1 Why would a company want to reduce its bond indebtedness before its bonds reach maturity? Indicate how this can be done and the correct accounting treatment for such a transaction. # 2 a. In a troubled debt situation, why might the creditor grant concessions to the debtor? b. What type of concessions might a credito

### Business Ethics and Taking Sides

See the attached file. The Ford Pinto Case in Ch. 12 of Business Ethics and Issue 15: Was Ford to Blame in the Pinto Case? in Ch. 4 of Taking Sides. ? Write a 1,050- to 1,400-word paper in which you address the following: o If you were involved in the dilemma discussed in the case study, what solution would you recommend?

### Journalizing transactions for Lighthouse, Manti, Squires; stock & option transactions

Please see both attachments. 13-47 Journalizing Stock Transactions Lighthouse Company began operations on Jan. 1. Authorized were 25,000 shares of \$1 par value common stock and 5000 shares of 10%, 100 par value convertible preferred stock. The following transactions involving stockholder's equity occurred during the