Explore BrainMass

Warrant Pricing

Warrants - Intrinsic Value, Premium

The People Power Corp. currently has a common stock selling for $15 per share. Warrants are also available. Three warrants entitle the holder to purchase one share of common stock for $9. Warrants are currently selling for $3. A. How much would you have to spend to buy one share of stock using the warrants? B. What is intri

Comet Airlines warrants: What is the intrinsic value?

22) Mr. John Hailey has $1000 to invest in the market. He is considering buying 50 shares of Comet Airlines at $20 per share. His broker suggests that he may wish to consider purchasing warrants instead. The warrants are selling for $5, and each warrant allows him to purchase one share of comet Airlines common stock at $18 pe


Using marketing tactics and legal threats, IBM is actively trying to keep mail order retailers from selling its line of personal computers. IBM earns the same wholesale price regardless of whether its products are sold be a mail order or by a full-service retailer. Why then would IBM want to discourage mail order sales?


Evaluate the following statement: Antitrust laws punish companies, not individuals. So long as you prove that you are following company policy, you are not personally subject to prosecution for pricing decisions. **Need a paragraph or two**

Pricing Discount Legality

A mail order company has begun to sell your prestige luggage at a 30% discount to the consternation of department stores that sell it at list price. You refuse to fill the mail order company's next order, explaining that you no longer wish to have that company sell your product. Is this practice illegal or legal? Explain your

Pricing product services

Some products and services are widely perceived as commodities. Still some companies build sustainable product advantages for even those products. How do they do it? Cite at least two examples

Pricing Problem

While airlines use segmented pricing strategies to charge business travelers more, most hotels actually give "corporate discounts" to business guests. Can you explain this anomaly?

Pricing problem

***Just need about a paragraph answer...Thanks! Steinway, a tiny but well regarded New York piano maker in the 1850"s grew quickly after Doretta Steinway, the founder's daughter, got the idea of offering free piano lessons with the sale of each piano. Can you explain this as a segmented pricing tactic? What are the segmen


Many local rental car agencies rent late model cars at substantially lower prices than national companies such as Hertz or Avis. Despite their higher prices, the national companies still retain most of the market. Explain why most renters patronize the national car rental companies despite their higher prices. How have the natio

Walking away from a business

At what point should a company "walk away from the business?" Should a company always strive to win every bid and avoid losing business?

Pricing for Rental Rates

Despite the fact that rental rates for commercial space and labor costs are generally higher in big cities than small towns; the prices of many products - such as electronics and clothing - are higher in small towns than in large cities. Can you explain this?

Eager Pizzas: transfer pricing method, performance evaluation system, pricing

In February 2009, you started as Group Operational Manager with Eager Pizzas; an organisation that operates a chain of 24-Hour Cooked Pizza Outlets in Australia, Singapore, Hong Kong, Malaysia, India, Fiji, South African, and New Zealand. The organisation divides its operations geographically into strategic business units (SBUs

Warrants for Ricketti Enterprises, Inc

The capital structure of Ricketti Enterprises, Inc., consists of 10 million shares of common stock and 1 million warrants. Each warrant gives its owner the right to purchase one share of common stock for an exercise price of $15. The current stock price is $17, and each warrant is worth $3. What is the new stock price if all war

Product Pricing and Profit Analysis

Freedom, Inc., management had formed cost studies and projected the following annual cost based on 40,000 units of production and sales: total annual cost % of variable portion of total annual cost direct material $400,000

Diluted earnings per share calculations.

In the diluted earnings per share calculation, the treasury shares method is used for options and warrants to reflect assumed reacquisition of common shares at the average market price during the period. If the exercise price of the options or warrants exceeds the average market price, the calculation would: Fairly present di

Common stock versus warrant investment

Common stock versus warrant investment: Susan Michaels is evaluating the Burton Tool Company's common stock and warrants to choose the better investment. The firm's stock is currently selling for $50 per share; its warrants to purchase three shares of common stock at $45 per share are selling for $20. Ignoring transactions c

A Pricing Decision Exercise

Better understanding with attachment (sorry but thank you) Tree Top Company is in the process of setting a selling price for its newest model stunt kite, thlooper. The controller of Tree Top estimates variable cost per unit for the new model to be as follows: Direct materials $15.00 Direct l

Advantage of using budgeted costs for transfer pricing

Please help with the following problem. Provide explanations. 1-An advantage of using budgeted costs for transfer pricing among divisions is that: A. overall corporate profitability is usually higher. B. it usually provides a basis for optimal decision making. C. the divisions know the transfer price in advance.

Transfer pricing (mulipule choice question2)

The ABC company has two Division :D1 & D2. D1 is in the USA and D2 is in Germany.D1"purchases"an intermediate product (P1) from D2. The US tax rate on corporate income is 35% and the German rate is 15%.If the company wants to minimize worldwide taxes ,what will it do with the transfer price of P1? A.Lower the transfer price

Transfer Pricing problem(Intensive problem)

The Assembly Division of American car Company has offered to purchase 90,000 batteries from the electrical division for $100 per unit.At a normal volume of 250,000 batteries per year,production costs per battery are as follows: Direct materials $40 Direct labor 24 Variable factory ov

Identification of Pricing Strategies

Using samples of consumer products such as soda, mobile phones, and designer clothing, identify what pricing strategy is being employed for each product and critique the effectiveness of the pricing strategy in promoting the product.

Pricing of Products

Select a product or service. Then select three different organizations that provide your selected product or service and compare the prices associated with your selected product or service. What is the difference between the prices among the different organizations? What is the rationale for this difference?

Cost-Plus Pricing

The Sterling Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available: Variable Manufacturing Cost: $200 Applied Fixed Manufacturing Cost: $90 Variable Selling and Administrative Cost: $60 Allo


Le'Fleur has two divisions: the Parfume Division and the Bottle Division. The Bottle Division produces containers that can be used by the Parfume Division. The Bottle Division's variable manufacturing cost is $1.80, shipping cost is $0.10 and the external sales price is $2.80. No shipping costs are incurred on sales to the Parfu


Gilbert Equipment, SA a French transportation equipment manufacturer, is heavily decentralized. Each division head has full authority on all decisions regarding sales to internal or external customers. The Provence Division has always acquired a certain equipment component from the Normandy Division. However, when informed that

Transfer pricing and what encourages managers in decisions

Put simply, transfer pricing is a management tool for assigning a "price" to internally transferred goods in order to simulate the marketplace, thus encouraging mangers to make decisions that are in the best interest of the ?: Manager. Operating unit. Firm. Manager, in the short-run. Unit in the sh