Compute a fair rate of return for a common stock which has a 1.2 beta

Required rate of return using CAPM:

A. Compute a fair rate of return for a common stock which has a 1.2 beta. The risk free rate is 6% and the market portfolio has an expected return of 16%
B. Why is the rate computed considered a fair rate.

Click here for the solution: Compute a fair rate of return for a common stock which has a 1.2 beta

In a business combination, the appropriate accounting for an excess of current fair values the combinee's identifiable net assets over the combinor's cost is to

1. In a business combination, the appropriate accounting for an excess of current fair values the combinee's identifiable net assets over the combinor's cost is to: (Points : 1)

2. Which of the following is not included in the combinor's cost of a combinee in a business combination? (Points : 1)

3. Slocum Corporation and Merton Company, both publicly owned companies, are planning a merger, with Slocum being the survivor. Which of the following is a requirement of the merger? (Points : 1)

4. On January 31, 2006, the home office of Wall Company collected a trade account receivable of Doris Branch. The accounting for this transaction by Wall Company should include a: (Points : 1)

5. Both a home office and a branch use the periodic inventory system. If at the end of an accounting period the balance of the branch's Home Office ledger account does not agree with the balance of the home office's Investment in Branch account because of a shipment of merchandise in transit from the home office to the branch: (Points : 1)

6. If both the home office and the branch of a business enterprise use the periodic inventory system, the home office's Shipments to Branch ledger account: (Points : 1)

7. The Income: Branch ledger account is maintained in the accounting records of: (Points : 1)

8. Among the journal entries (explanation omitted) in the accounting records of the home office of Price Company was the following:
Office Equipment: Lang Branch 12,500
Investment in Lang Branch 12,500
This journal entry indicates that: (Points : 1)

9. The Home Office ledger account in the accounting records of a branch is best described as: (Points : 1)

10. The following journal entry (explanation omitted) appeared in the accounting records of Marty Corporation's only branch:
Operating Expenses 600,000
Home Office 600,000
The journal entry indicates that: (Points : 1)


Click here for the solution: In a business combination, the appropriate accounting for an excess of current fair values the combinee's identifiable net assets over the combinor's cost is to

In 2008, Adrianna contributed land with a basis of $16,000 and a fair market value of $25,000 to the A&I Partnership in exchange for a 25% interest in capital and profits

In 2008, Adrianna contributed land with a basis of $16,000 and a fair market value of $25,000 to the A&I Partnership in exchange for a 25% interest in capital and profits. In 2011, the partnership distributes this property to Isabel, also a 25% partner, in a no liquidating distribution. The fair market value has increased to $30,000 at the time the property is distributed. Isabel’s and Adrianna’s bases in their partnership interests are each $40,000 at the time of the distribution.

a. How much gain or loss, if any, does Adrianna recognize on the distribution to Isabel? What is Adrianna’s basis in her partnership interest following the distribution?
b. What is Isabel’s basis in the land she received in the distribution?
c. How much gain or loss, if any, does Isabel recognize on the distribution? What is Isabel’s basis in her partnership interest following the distribution?
d. How much gain or loss would Isabel recognize if she later sells the land for its $30,000 fair market value? Is this result equitable?
e. Would your answers to (a) and (b) change if Adrianna originally contributed the property to the partnership in 2000?

Click here for the solution: In 2008, Adrianna contributed land with a basis of $16,000 and a fair market value of $25,000 to the A&I Partnership in exchange for a 25% interest in capital and profits