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Valuing Securities using Accounting Information

Accounting II

1. Unruh Corp. began operations in 2007. An analysis of Unruh's equity securities portfolio acquired in 2007 shows the following totals at December 31, 2007 for trading and available-for-sale securities: Trading Available-for-Sale

Debt Securities and Amortization Schedules

(Debt Securities) Presented below is an amortization schedule related to Kathy Baker Company's 5-year, $100,000 bond with a 7% interest rate and a 5% yield, purchased on December 31, 2004, for $108,660. Date Cash Received Interest Revenue Bond Premium Amortization Carrying Amount of Bonds 12/31/04 $108,660 12/31/05 $7,

Alvarez Corp available for sale securities: analyze transactions

P17-12 (Available-for-Sale Securities?Statement Presentation) Alvarez Corp. invested its excess cash in available-for-sale securities during 2006. As of December 31, 2006, the portfolio of available-for-sale securities consisted of the following common stocks. Security Quantity Cost Fair Value Keesha Jones, Inc. 1,000 shares

1) If a security can easily be converted to cash without a loss in value, it 2) According to the segmented markets theory, if most investors suddenly preferred to invest in short term securities and most borrowers suddenly preferred to issue long term securities there would be

1) If a security can easily be converted to cash without a loss in value, it a. is liquid b. has a high after tax yield c. has high default risk d. is illiquid 2) According to the segmented markets theory, if most investors suddenly preferred to invest in short term securities and most borrowers suddenly preferred to i

Financial intermediaries, Securities

Please help with the following multiple choice problems. 1) Without the participation of financial intermediaries in financial market transactions, a. information and transaction costs would be lower b. transaction costs would be higher but information costs would be unchanged c. information costs would be higher but t

General journal entries for trading securities

XYZ Company has the following securities in its portfolio of trading equity securities on December 31, 2007: Cost Fair Value 5,000 shares of Nicky Corp., Common $155,000 $139,000 10,000 shares of Max Stores, Common 182,000 190,000 $337,000 $329,000 All of the securities had been purchased in 2007. In 2008, XYZ c

Industries of Selected Securities: Example Problems

I need some assistance on this assignment as do not know what industries these stocks are in. Identify the industries of your six selected securities, including bonds. 1. GE (General Electric) 2. Home Depot 3. Cisco Systems 4. Microsoft 5. Wal-Mart The selected bond issued by Santa Rosa, California Wastewater S

Valuing Gold Reclaimed from Old Personal Computers

A number of industrial products include gold and silver as a component since they have very good conductive properties. The S&M Smelting Company engages in the recovery of gold from such products and is considering a contract to begin extracting the gold from the recycling of personal computers. The project involves contracting

How much cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50%? How high can the price of the stock go before you get a margin call if the maintenance margin is 30%? What will be your rate of return after 1 year if you close out your short position and the stock is selling at $25 ($35) per share?

Suppose you are bearish on Stock Y and decide to sell short 100 shares at the current market price of $30 per share. You earn no interest on the funds in your margin account and the cost of borrowing shares is 0.25%. a) How much cash or securities must you put into your brokerage account if the broker's initial margin require

SWIFT's implementation of the "smart card"

Question 1 SWIFT's implementation of the "smart card" is expected to a.decrease the likelihood of electronic fraud. b.remove the need for secret information to be sent through mail. c.guarantee the identity of the sender. d.all of the above Question 2 A Just-In-Time (JIT) inve

Contemporary Financial Topics: What is the SEC?

I have to answer the questions below in 250 words. I have been reading the chapter and don't fully understand these questions. What is the SEC? Describe 2 ways that it impacts financial decision-making?

Assume that you have a short investment horizon (less than one year). You are considering two investments: a one-year Treasury security and a 20-year Treasury security. Which of the two investments would you view as being more risky?

Assume that you have a short investment horizon (less than one year). You are considering two investments: a one-year Treasury security and a 20-year Treasury security. Which of the two investments would you view as being more risky? Explain your answer 100 words or more "why do corporations and governments (local, stat

20 MCQ: investment income, trading securities, dividends, bonds, equities, market

1. Poster Inc. owns 35 percent of Elliott Corporation. During the calendar year 2003, Elliott had net earnings of $300,000 and paid dividends of $36,000. Poster mistakenly accounted for the investment in Elliott using the cost method rather than the equity method of accounting. What effect would this have on the investment accou

Valuing bonds

Finding the price of a 10 year pure discount bond paying $1000 at maturity if the YTM is 5%, 10% and 15% Also, the same company issued a bond with a par of $1000, time to maturity of 20 years, a coupon rate of 8% with semiannual payments. Please calculate the price of this bond if the YTM is 8%, 10% and 6%. Lastly, If the

Short-term securities

1. If the Federal Reserve sells $40 billion of short-term U. S. Treasury securities to the public, other things held constant, what would be the most likely effect on short-term securities prices and interest rates? a. Prices and interest rates will both rise. b. Prices will rise and interest rates will decline.

Comparing different securities

Comparing different securities (like CD's, bonds, and common stocks), please explain to me why it is important to know what interest rate should be used in that comparison. Provide a specific illustration complete with numbers. thank you