Kathy Snow wishes to purchase shares of Countdown Computing, Inc. The company's board ofdirectors has declared a cash dividend of $0.80 to be paid to holders of record on Wednesday, May12. a. What is the last day that Kathy can purchase the stock (trade date) and still receive thedividend? b. What day does this stock begin trading ex dividend? c. What change, if any, would youexpect in the price per share when the stock begins trading on the ex dividend day? d. If Kathy heldthe stock for less than one quarter and then sold it for $39 per share, would she achieve a higherinvestment return by (1) buying the stock prior to the ex dividend date at $35 per share and collectingthe $0.80 dividend or (2) buying it on the ex dividend date at $34.20 per share but not receiving thedividend?

Step 1: A share that is trading on the market without the next dividend value is said to be an…

Answered: Kathy Snow wishes to purchase shares of…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 80E: Stockholders' Equity Terminology A list of terms and a list of definitions or examples are presented...

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Kathy Snow wishes to purchase shares of Countdown Computing, Inc. The company's board of directors has declared a cash dividend of $1.13 to be paid to holders of record on Wednesday, Sep. 21. a. What is the last day that Kathy can purchase the stock and still receive the dividend? b. What day does this stock begin trading ex dividend? c. What change, if any, would you expect in the price per share when the stock begins trading on the ex-dividend day? d. Kathy believes that she will be able to sell the stock for $46.92 in a few months. Tomorrow is the ex-dividend date, and the stock price now is $42.92. Is she better off buying the stock now so she can capture the dividend, or should she wait until tomorrow, miss the dividend, and buy the stock at a slightly lower price?
On March 1st, Frank opens a brokerage account and sell shorts 200 shares of Doggie Treats Inc. at $60 per share. The initial margin requirement is 50%. a. What is the margin in Frank’s account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $50 per share by the end of March, what is the remaining equity in his account? c. What is the monthly rate of return on his margined position?
On August 1, Shamrock Finance Inc. buys 2,500 Datawave common shares for trading purposes for $95,000 cash. On October 15, Shamrock receives a cash dividend of $2.35 per share from Datawave. On December 1, Shamrock sells the shares for $100,000 cash. Prepare the journal entry to record the purchase of the shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Aug. 1 Investment in Associate Cash (To record purchase of investment.) Date Account Titles and Explanation Oct. 15 Prepare the journal entry to record the receipt of the dividend. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Cash Gain on Fair Value Adjustment-FVTPL (Collection of dividend.) Dec.…
Assume you purchased 1,000 shares of Pharma Group, a pharmaceuticals manufacturer, at the market's opening price of $22/share on January 4, 2019, and held the position for the following two years. Further assume you reinvested back into the stock at its closing price on that same day the dividends were paid [Note: you may assume you can hold fractional shares rounded to two decimal places]. You then sold the entire position at the closing price of $23.96 on January 3, 2021. Here are the dividends you received: Dividend Date Dividend per Share Stock's Closing Price May, 1, 2019 $0.299412 $19.49 April 29, 2020 $0.280880 $21.39 What was the holding period return of this position? What was the effective annualized return?
Assume that Echoing Green, featured in this chapter’s opener, makes an investment in Sustain Inc., a sustainability consulting firm. The company purchases 200 shares of Sustain stock for $15,000 cash plus a broker’s fee of $500 cash. Sustain has 500 shares of common stock outstanding, and Echoing Green will be able to significantly influence its policies. Required 1. Prepare the journal entry to record the investment in Sustain on January 1. 2. Sustain declares and pays a dividend of $1,000. Prepare the journal entry to record Echoing Green’s receipt of its share of the dividend on July 1. 3. Sustain reports net income of $5,000. Prepare the journal entry to record Echoing Green’s share of those earnings on December 31.
You purchased some shares in Flying Dutchman.com on 12 August 2022, at price $67.41. On 09 November 2022 and 03 February 2023, Flying Dutchman.com paid dividends of $2.85 and $1.08, respectively. The price of the shares on 09 November 2022 was $65.85, while on 03 February 2023, it was $66.79. Finally, on 22 April 2023, you sold the shares for $67.81. What was your holding period return over the time you owned Flying Dutchman.com?
On July 1, 2020, Phoenix company offers to issue their accountant 800 common shares at their current market value of $12 per share, to equal the fair value of $9,600. The accountant accepts the offer of shares in exchange for accounting services. Record the journal entry for the issuance of shares. Select one: a. Debit Cash $9,600, Credit Common Shares $9,600 b. Debit Accounting Fees Expense $9,600, Credit Cash $9,600 c. Debit Accounting Fees Expense $9,600, Credit Common Shares $9,600 d. Debit Cash $9,600, Credit Service Revenue $9,600
On July 1, 2020, just after a dividend payment, you purchased 20,000 shares of Endicott Johnson stock at a price of $704.44 per share. The company paid annual dividends of $3.50 on June 30 of each year. On June 30, 2023, just after receiving the dividend payment, you sell the stock for $707.36. What annual return did you earn?
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On Jan 1, you sold short one round lot (i.e. 100 shares) of ABC stock at $21/ share. On Mar 1, adividend of $2/ share was paid. On Apr 1, you covered the short sale by buying the stock at aprice of $15/ share. You paid $0.5/ share commission for each transaction. What is the finalvalue in your account on Apr 1 (end of day)?
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Answer all subparts a,b,c,d.if answered within 45mins,it would be helpful!! Pania Biddle owns 500 shares in Mainfreight Ltd (MFT), a company listed on the New Zealand Exchange (NZX). MFT keeps an imputation credit account as required under tax law. On 1 June 2020 declared a fully imputed final dividend of 34 cents per share to be paid to shareholders on 17 July 2020. Explain the purpose of an imputation credit account (ICA) and provide one example each of the debit entries in the ICA with appropriate references to ITA 2007. Also, calculate:a) the total imputation credits attached to the dividends Pania will receive.b) the total RWT on the dividends.c)the total net dividends Pania will be paid.d) the total gross dividend.

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