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Warrant Pricing

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

Transfer-Pricing

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

Transfer-Pricing

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

Bond Pricing and Refunding Analysis

Barton Simpson, the chief financial officer of Broadband, Inc. could hardly believe the change in interest rates that had taken place over the last few months. The interest rate on A2 rated bonds was now 6%. The $30 million, 15 year bond issue that his firm has outstanding was initially issued at 9% five years ago. Because

Transfer Pricing Divisions

Please verify my three answers are correct. The Company A is composed of two divisions, DivPulp and DivPaper. DivPulp produces a component that is needed by DivPaper to manufacture the final product. DivPulp also has the opportunity of selling the product to outside customers due to excess capacity. DivPulp's product informat

Bolus Computer Parts Inc- Target Pricing

Bolus Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 50,000 units. Per Unit Total: Direct materials $50 Direct labor $25 Variab

Public Investing Ratios

How do you attract investors with ratios when the normal public does not know anything about ratios? What are ways to illustrate these ratios?

Stock Pricing - Crunchy Chicken

Crunchy Chicken is launching an IPO. They are concerned about how to price the stock. Their investment bank suggests a price of $20 given their performance over the past 2 years. The Crunchy Chicken company paid a dividend of $1.25 per share in the next year. They anticipate that the company will continue to grow at a consta

Managers should base pricing decisions on both cost and market factors.

1. Managers should base pricing decisions on both cost and market factors. In addition, they must also consider legal issues. Describe the influence that the law has on pricing decisions. 2. "It is impossible to use DCF methods for evaluating investments in research and development. There are no cost savings to measure, and

Transfer Pricing

See attached, have general idea of costing, need assistance with verification of costs and determining consideration issues listed. M10 - 2 Transfer Pricing Smith Company has two divisions, Division A and Division B. Division A currently sells components to Division B for $10 per unit. The cost of Division A to

Cost Approaches to Pricing

Nathan and Kylie Morse have invested $500000 in N&K's Place. Their projected costs and activities are as follow: Variable costs 60% Monthly fixed costs $30,000 Monthly covers sold 10000 Average tax rate 20% 1. What must the average food service check be to break even? 2. If a monthly profit of

Pricing Decisions and Wealth of Firm

Many believe that any selling price above the contribution margin will add to the wealth of the firm. This being the case, is there a danger in the decision rule that states "always accept any offer that has a positive contribution margin?"

Pricing Strategy for a Health Spa

You have just been hired as manager of a new health spa in Retirement Village, Florida. The owner has commissioned a market study that estimates the average customer's monthly demand curve for visiting health spa to be Q(d) = 50-.25P. The cost of operating is C(Q)=3Q, where Q is the number of visits. The owner has been chargi

Risk: Seat Pricing on an Airline

Prior to 1978, civil aviation in the United States was regulated by the Civil Aeronautics Board (CAB), and route and fare changes took quite a bit of time. The 1978 Airline Deregulation Act gave airlines the freedom to enter or exit routes and alter fares at will. One immediate result of deregulation was the proliferation of "

Purpose of Pricing Plans

AT&T offers a menu of pricing plans. Plans with higher monthly charges include a larger number of "free minutes." What is the purpose of this menu.

Pricing Methods - Going-Rate/Competition

A former co-worker now represents a company that manufactures a new type of laboratory-made gemstone, called ZC, which is similar to, but better than, cubic zirconia. These gemstones are used in rings, pendant type necklaces, bracelets and pins which your firm designs. While they have begun to sell their ZC jewelry to selected s