1 answer

15. Suppose your employer offers you a choice between a $4,900 bonus and 100 shares of...

Question:

15. Suppose your employer offers you a choice between a $4,900 bonus and 100 shares of the​ company's stock. Whichever one you choose will be awarded today. The stock is currently trading at $62.91 per share.

a. If you receive the stock bonus and you are free to trade​ it, which form of the bonus should you​ choose? What is its​ value?

b. If you receive the stock bonus and you are required to hold it for at least one​ year, what can you say about the value of the stock bonus​ now? What will your decision depend​ on?


Answers

Solution:

a)

Cash Bonus = $4,900

Stock Bonus =$6,291 ($62.91*100)

Therefore we can buy the stock for $6,291 in cash today and it's worth is $6,291 which is higher compared to cash bonus.

b)

Since we can able to buy the stock today for $6,291 the worth of the stock bonus will not be higher than $6,291.

However if we are not permitted to trade the corporation's stock for the subsequent years, because it's worth might be a reduced amount of $6,291. The worth will be expected in one year where the risk is also involved in them.

We may choose to take the $4,900 in cash than to take $6,291 after a year.

.

Similar Solved Questions

1 answer
The armature of a small generator consists of a flat, square coil with 160 turns and...
The armature of a small generator consists of a flat, square coil with 160 turns and sides with a length of 1.55 cm. The coil rotates in a magnetic field of 8.05×10−2 T What is the angular speed of the coil if the maximum emf produced is 2.60×10−2 V?...
1 answer
In a study of perception, 80 men are tested and 7 are found to have red/green...
In a study of perception, 80 men are tested and 7 are found to have red/green color blindness. A 99% confidence interval for this proportion would be .0875 plus or minus: In a study of perception, 80 men are tested and 7 are found to have red/green color blindness. A 99% confidence interval for ...
1 answer
You have the following exchange rate: 2011 MXN1: USD 0.08 2012 MXN1: USD 0.09 How many...
You have the following exchange rate: 2011 MXN1: USD 0.08 2012 MXN1: USD 0.09 How many percent does Mexico Peso (MXN) change during the 2011-2012 period. NOTE: positive change means appreciate while negative change means depreciate. In Sakai, don't put % sign in your answer. Thus, if you answer ...
1 answer
What do my percentages tell me about the gc anaylsis thay i ran pece Analysis T...
what do my percentages tell me about the gc anaylsis thay i ran pece Analysis T 2 19 3:37 PM EV NK MANDARIN EV NK MANDARIN Sample Type Muhinjection Dilution Factor Original Data Name Baseline Data Name Method Nang Report Name Balch Name Uvexposition GC-DATACHM-2210L FALL 2019SPECIAL PROJECTSAV ...
1 answer
1. Suppose a consumer's preference over consumption (C) and leisure (1) can be described by a...
1. Suppose a consumer's preference over consumption (C) and leisure (1) can be described by a utility function: U (1,c) = Inl+c. Her budget constraint can be written as: c=E+w(L-1). All notations have the same interpretation as in my lecture notes, Section 13E.1. a. (3 points) Solve her demand f...
1 answer
A nurse uses at 27 gauge needle whose inner diameter is 0:210mm. The patient is injected...
A nurse uses at 27 gauge needle whose inner diameter is 0:210mm. The patient is injected with 2:0ml of medicine in 6:0s. What is the speed of the medicine when it leaves the needle?...
1 answer
Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system...
Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department’s predetermined overhead rate is based on machine-hours and the Customizing D...
1 answer
The resting pulse rates of 20-39 years old males in the United States was estimated as...
The resting pulse rates of 20-39 years old males in the United States was estimated as 71±0.4 (mean ± SE) BPM for non-Hispanic whites and 69±0.4 (mean ± SE) BPM for non-Hispanic blacks (Ostchega et al., 2001). Based on these data can we be 95% certain that among 20-39 yea...
1 answer
Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic...
Keller Company makes two models of battery-operated boats, the Sandy Beach and the Rocky River. Basic production information follows: Sandy Beach $19.00 Rocky River $ 27.40 17.30 106.e0 Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 14.60...
1 answer
CH 23 #7 Check my work 7 Exercise 23-10 Keep or replace LO P5 1.11 points...
CH 23 #7 Check my work 7 Exercise 23-10 Keep or replace LO P5 1.11 points Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $40,000 and a remaining useful life of five years, at which time its salvage value will be zero. It has a current mar...
1 answer
Question 3 Fair x| ⑥ AM/XI ⑥ We xl ⑥ Den X ⑥Hitc × | ⑥...
Question 3 Fair x| ⑥ AM/XI ⑥ We xl ⑥ Den X ⑥Hitc × | ⑥ KAC x I ⑥ swox】⑥ENC × į @ The ye D Pro xu+ com/webapps/blackboard/content/listCon ntent,jsp?course id 38099. 18content.id- 1038418 18mode-reset D. 80 Question 2 Complete the facto...
1 answer
2. Calculate the total cost to government of a $5 subsidy given that Ps = 0.25Qs+5...
2. Calculate the total cost to government of a $5 subsidy given that Ps = 0.25Qs+5 and Pd=-0.750d + 15 under equilibrium. (Hint: Adjust the y-intercept for the supply or demand curve to get the new Ps equation)....
1 answer
A fan forces air over a computer circuit board with surface area of 70 cm2 to...
A fan forces air over a computer circuit board with surface area of 70 cm2 to avoid overheating. The air temperature is 300 K while the circuit board surface temperature is 320 K.Using data from Table 2.1 (also shown in the hint), determine the following. The largest heat transfer rate, in W, that ...
1 answer
CHART OF ACCOUNTS Port Ormond Carpet Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121...
CHART OF ACCOUNTS Port Ormond Carpet Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process-Spinning Department 142 Work in Process-Tufting Department 151 Factory Overhead-Sp...
1 answer
-stasis
-stasis...
1 answer
5. Circle the molecule that matches the best description for each set of reagents. Briefly explain...
5. Circle the molecule that matches the best description for each set of reagents. Briefly explain your reasoning in the box provided. (a) Faster in an S12 reaction: н, сун,слуғ (b) Faster in an E1 reaction: (c) Better nucleophile: CH, H,C^NH Học...
1 answer
The systolic blood pressure of adults in a large city is nearly normally distributed with a...
The systolic blood pressure of adults in a large city is nearly normally distributed with a mean of 117 and standard deviation of 19. Someone qualifies as having Stage 2 high blood pressure if their systolic blood pressure is 160 or higher. a. Around what percentage of adults in the USA have stage 2...