...The film opens with the girl, Natalie (Morgan Griffin), driving through the cliff of San Fernando Valley, 16 miles (25.75 kms) north of Los Angeles, when suddenly the rock slides onto the car, causing it to fall then hang into the edge of cliff. Moments later, Los Angeles Fire Department helicopter-pilot Chief Raymond "Ray" Gaines (Dwayne Johnson) and his other colleagues comes to rescue the girl trapped in the car. Ray safely rescues the girl moments before the car falls into the cliff. In CALTECH, Dr. Kim Park (Will Yun Lee) receives a data of minor earthquakes in Falco, Nevada and shows it to his collegue and seismologist Lawrence Hayes (Paul Giamatti). The minor quakes measure 2.0 to 2.6. Hayes is curious of why such a minor quakes can produce even there are no faults in Nevada. Hayes and Park decide to go to Nevada to test the theory. While Ray is calling for his daughter, Blake (Alexandra Daddario), for the upcoming trip to San Francisco, he receives a divorce papers. Recently, he is divorced from his estranged wife Emma (Carla Gugino) and she is now with his new boyfriend Daniel Riddick (Ioan Gruffudd). Meanwhile, at the Hoover Dam, along with Hayes, Park is now testing a magnetic pulse of quake. Suddenly, his device detects a sudden spike pulse then a stronger earthquake triggers. It measures 7.0 that ever recorded. As the dam starting to break, Park struggles to escape while Hayes tells the people, still on the dam, to get out of it. Park has now exits the dam...
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...Advantages and Disadvantages of Stocks and Bonds Name Institution Advantages and Disadvantages of Stocks and Bonds Introduction Stocks and bonds qualify as the two major classes of assets that are used by investors in planning their portfolios for investment. Stocks offer the investors an opportunity to have a stake in the company, whereas the bonds are affiliated to the loans that are made to a company. Generally stocks are considered to be very volatile and much risky to invest in as compared to the investment in bond (Alexieff, 2014). However there exist different stock and bond types that have with them varying volatility levels and the risks also vary. Types of Stocks and Bonds There exist different types of stocks and bonds from which an investor could choose from. Out of these stock and bond types, some make sound investment records than other types of bonds or stocks. Types of Stocks Stocks are classified under two major categories which include common stocks and the preferred stocks. The preferred stock is further classified into the participating and the non-participating stocks. Majorly most investors usually trade in the common stocks only (Veale & New York Institute of Finance, 2011). Under the common stocks, it is very easy to evaluate stock types depending on a number of primary factors. Diversified investment portfolios involve wide and vast company types of stocks. Stocks can be classified as follows: Stocks by size- there are various types...
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...Investing in Stocks and Bonds Stocks and Bonds are different in many ways. A stock is a portion or share of the ownership of a corporation. A share will give the owner of the stock the company’s profits or loses over time. The good thing about stocks is they can be sold at almost any time as long as there is someone willing to buy. A bond, on the other hand, is a fixed interest financial asset issued by governments, companies, banks, and other large entities. Bonds also are called funds. Bonds pay the owner a fixed amount a specific date, or on specified dates depending on the type of bond. If the bond is a discount bond, then there is one pay date at the end. If the bond is a coupon bond, then it pays a fixed amount over a specific time. The time could be by month, or by year. My team was assigned the task of investing 120,000 dollars over ten years. We were to invest 80% of 120,000 dollars in stocks and 20% in bonds. We invested in six different stocks and two bonds. Also, we split the money. Therefore, we each invested 6,000 dollars per year in three stocks and one bond. The first stock I decided to invest in was Nike Inc. Nike Inc. is a strongly advertised and a well-distributed company (Nike). Nike Inc. is known well across the world (Nike). When it comes to shoes, clothes, or sports apparel, everyone has at least one item of Nike. In most cases, people own multiple things of Nike equipment. Nike Inc. spends great amounts of time and money on their...
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...Stocks Stocks are a form of ownership; they represent interest in a company's development. Typically, investors are given no guarantees about returns of the beginning venture. Truth be told, the productivity of the venture depends completely after rising stock cost, which, at the most key level, relates specifically to the execution and development (expanding benefits) of the company. Advantages of Investing in Stocks Stocks offer gainful returns back with constrained losses. When you put resources into stocks, you have the capability of profiting than you would with different types of investments, for example, fixed rate bonds and certificate of deposits, on the grounds that stocks participates specifically in the development of the economy and as time goes on have truly beat whatever other type of investment. However, any potential losses are constrained to the measure of your starting venture, not at all like different manifestations of investment that are utilized, for example, land where you could owe more than your original up front installment. In this respect, shareholders have constrained risk for the activities of the organization's administration in light of the fact that shareholders are detached investors that just participates in the capital gains and profits of the organization. Stocks additionally offer a lot of liquidity on the grounds that they can be sold at their market value and changed over to money whenever on the stock trade. Ultimately, stocks...
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...Phase 5 IP Vanilla Stocks and Bonds Part 1 Bonds It has been established that it is crucial to be able to properly value a bond for finance. Two companies have been chosen to represent this action for this document Apple Inc. as well as IBM which are both in the technology sector and have long term debt, have bonds and also stocks available for sale. We are going to determine the length until maturity, the yield to maturity and then also the price of the bond today. While keeping this information in mind we can determine what time value of money illustrates about each bond. A credit rating has been assigned to each company and we can determine which company may be the better investment for the bank as well as the investor. In the end we can make an analysis to which bond may seem more attractive. Bonds play a critical role in the economy and it is important to understand just how they work as well as how to determine which investment is recommended for the individual buyer. As we have previously learned bonds can be issued by a corporation, government or government institution where the individual that is “lending” the money is the creditor and rather than owning part of the company as you would with a stock purchase. In this document we are going to take a closer look at corporate bonds. Why would a company issue bonds in the first place? In most cases a business will make this decision in order to borrow a massive volume of money for the purpose of possible developments...
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...BPI whips up cocktail of stocks and bonds for retail investors MANILA, Philippines—The Philippine stock market has been suffering from bipolar disorder. Since the start of the year, the mood pendulum has swung from one extreme of successive record highs to the other marked by frantic fund withdrawals that erased this year’s considerable gains. There was a time not so long ago when such wild swings in the stock market’s performance would have caused Filipino investors to rush to their bank or fund manager and convert their investments into cold cash they can hide under their pillow. But local investors have matured greatly since the global financial turmoil precipitated by the US subprime crisis in 2008. Local markets are jittery but calm, and investments in moderate-to-high-risk investments such as stocks and bonds have remained largely intact. This can be attributed in part to the great strides that leading banks and financial institutions such as the Bank of Philippine Islands, the country’s oldest bank, have taken over the past few years to improve the financial literacy of Filipinos and open their minds to a wide range of investment possibilities. Having record low interest on savings and time deposits of around 1 percent has also spurred great interest in financial instruments other than traditional bank deposits. The yield is just too low and not enough to even at least beat inflation, or the annual rise in the prices of basic commodities. BPI is taking advantage of this...
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...money. For Individuals the implications can be seen when deciding how much to save for retirement, valuing stocks when doing a personal investment or when calculating loan repayment schedule. For a corporation time value of money concept comes in to play when evaluating a project financial viability, when making new investment in plant and machinery and when investing in stocks and bonds. 2. Bonds I was able to learn about the types of bonds issued in the market and the risk associated with the bond market, pricing of the bonds, relationship between bond price and interest rate. A bond is a long term debt instrument issued by a corporate or a government in order to raise capital. This is a contract under which the borrower (a corporate or a government) agrees to make a payment of principle and interest on a specific future date to the holder of the bond. Corporate Bond, Treasury bond, high-yield corporate bonds (low quality also known as junk bonds), foreign bonds, mortgage-backed bonds and municipal bonds are few types of bonds available in the market for investment. Treasury bond is considered to be the ultra safe bond. Corporate bond can default depending on the performance of the company and also can be called back when the market interest rate comes down. For example when the coupon rate is 8% and market interest rate is 4% a company can call the bond and re issue it at lower...
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...in U.S. stocks and in U.S. treasury bonds makes up for a large portion of investment assets in the United States economy. The main difference between the two asset classes is that stocks are a form of equity investments which represents ownership in a company for the investor, and bonds are debt investments from which the investor earns interest on from the bond issuer. Both forms of investment assets correlate with each other in terms of prices increasing and decreasing over periods of time. Stock market prices and Treasury bond prices both fluctuate due to changes in different economic factors. Factors in the economy sometimes moves stock and bond prices in opposite directions yet it also sometimes moves them in the same direction depending on the current situation taking place in the economy. Bond and stock prices are both affected by different things in the economy. Bonds are affected most greatly by interest rates and in turn are a function of current market interest rates. The prices for which bond issuers sell bonds for are correlated with the interest rates of the bonds. When interest rates rise it causes the prices of bonds to fall and vice versa in order to make bonds attractive for investors to buy. While many different economic factors affect interest rates in the economy, bond prices are most directly affected by the increase and decrease of interest rates. Stock prices are affected differently than bond prices. One factor that affects stock prices...
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...E15-3(Stock Issued for Land) Twenty-five thousand shares reacquired by Elixir Corporation for $53 per share were exchanged for undeveloped land that has an appraised value of $1,700,000. At the time of the exchange the common stock was trading at $62 per share on an organized exchange. Hint: (LO 3) Instructions a. Prepare the journal entry to record the acquisition of land assuming that the purchase of the stock was originally recorded using the cost method. b. Briefly identify the possible alternatives (including those that are totally unacceptable) for quantifying the cost of the land and briefly support your choice. (a) Land ($62 X 25,000) 1,550,000 Treasury Stock ($53 X 25,000) 1,325,000 Paid-in Capital from Treasury Stock 225,000 (b) One might use the cost of treasury stock. However, this is not a relevant measure of this economic event. Rather, it is a measure of a prior, unrelated event. The appraised value of the land is a reasonable alternative (if based on appropriate fair value estimation techniques). However, it is an appraisal as opposed to a market-determined price. The trading price of the stock is probably the best measure of fair value in this transaction. E16-1(Issuance and Conversion of Bonds) For each of the unrelated transactions described below, present the entry(ies) required to record each transaction. 1. Grand Corp. issued $20,000,000 par value 10% convertible bonds at 99. If the bonds had not been convertible, the company's investment...
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...yours alone - any discussion of either the questions on the assignment or your answers with anyone other than your instructor will be considered as cheating and, thus, as a violation of the GSU honor code. All questions are equally weighted. PART I: MULTIPLE CHOICE – Choose the letter of the most correct answer for each question. Record only one answer per question. Each question is worth 4 points. 1. IS THE FOLLOWING STATEMENT TRUE or FALSE? “A financial security is simply a contract between the provider of funds and the user of these funds that clearly specifies the amount of money that has been provided and the terms and conditions of how the user is going to repay the provider.” a. True b. False 2. A consol is a bond that: a. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 30 years. b. Pays a fixed annual coupon amount, and when originally issued, is set to mature in 50 years. c. Does not pay an annual coupon (i.e., the annual coupon payment is $0) but when it matures pays out the par...
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... Table of Contents EXECUTIVE SUMMARY 1. INTRODUCTION 2. NATURE OF CONVERTIBLE BONDS 3. FINANCIAL ADVANTAGES AND DISADVANTAGES 3.1 3.2 ADVANTAGES DISADVANTAGES ii 1 1 2 2 2 3 5 5 6 7 4. ACCOUNTING TREATMENT 5. LOGIC OF THE ACCOUNTING REQUIREMENTS 6. CONCLUSION 7. RECOMMENDATIONS REFERENCES (i) Page 3 EXECUTIVE SUMMARY This report provides information about convertible bonds for the managers of Hamilton Manufacturing. Included is information about the nature of convertible bonds, financial advantages and disadvantages Hamilton could expect from issuing such bonds, and their accounting treatment. A convertible bond is a debt security that carries the option of exchange for an equity security, usually common stock. The bond indenture specifies when the bonds may be converted and a conversion price or ratio. The conversion price is usually from 10 to 20 percent above the market price of the common stock at the time of issue. Both the issuer and the investor expect the market price of the stock to rise above the conversion price; therefore, bondholders are likely to convert the bond into equity. Convertible bonds would offer Hamilton three advantages: ▪ The company could issue the bonds at a premium or at a low stated interest rate, which investors would accept because of the conversion privilege. ▪ The company could avoid another stock issue now, when the price of Hamilton's stock is low. ▪ Management...
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...* Question 1 0 out of 1 points | On January 1, Martinez Inc. issued $4,000,000, 11% bonds for $4,260,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium. At the end of the first year, Martinez should report unamortized bond premium of _____.Answer | | | | | Selected Answer: | $246,840 | Response Feedback: | ($4,000,000 × .11) – ($4,260,000 × .10) = $14,000 ($4,260,000 – $4,000,000) – $14,000 = $246,000. | | | | | * Question 2 0 out of 1 points | Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2012: Common stock, $20 par value; authorized 75,000 shares; | | | Outstanding 45,000 shares | $900,000 | Paid-in capital in excess of par | 250,000 | Retained earnings | 300,000 | | | $1,450,000 | During 2013, the following transactions occurred relating to stockholders' equity:3,000 shares were reacquired at $28 per share. 3,000 shares were reacquired at $35 per share. 1,800 shares of treasury stock were sold at $30 per share. For the year ended December 31, 2013, Oaks reported net income of $450,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2013, balance sheet?Answer | | | | | Selected Answer: | $1,315,000 | Response Feedback:...
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...Discount on Bonds Payable 100,000 Bonds Payable 10,000,000 Unamortized Bond Issuance Costs 70,000 Cash 70,000 ------------------------------------------------- 2- Cash 9,800,000 Discount on Bonds Payable 600,000 Bonds Payable 10,000,000 PIC – Stock Warrants (100,000 warrants) 400,000 ------------------------------------------------- 3- Debt Conversion Expense 75,000 Bonds Payable 10,000,000 Discount on Bonds Payable 55,000 Common Stock 1,000,000 PIC in Excess of Par 8,945,000 Cash 75,000 E16-6 December 31, 2012. Bond Interest Expense 117,000 Premium on Bonds Payable (60,000 x 1/20) 3,000 Cash (3,000,000 x 8% x 6/12) 120,000 January 1, 2013. Bonds Payable 600,000 Premium on Bonds Payable 9,600 Common Stock (8 x 100 x 600,000/1,000) 480,000 PIC in Excess of Par 129,600 March 31, 2013. Bond Interest Expense 11,625 Premium on Bonds Payable (12,000 / 8 x 3/12) 375 Bond Interest Payable (600,000 x 8% x 3/12) 12,000 Bonds Payable 600,000 Premium on Bonds Payable 11,625 Common Stock 480,000 PIC in Excess of Par 121,625 June 30, 2013. Bond Interest Expense 58,875 Premium on Bonds Payable 1,125 Bond Interest Payable (600,000 x 8% x 3/12) 12,000 Cash (1,800,000 x 8% x 6/12) 72,000 E16-8 Journal Cash 3,150,000 Unamortized Bond Issuance Costs...
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... a. Why do the lines for the stock plan and the bond plan have different slopes? What’s the significance of this difference? Because the calculation of EPS is net income divided by outstanding shares, two lines for the stock plan and bond plan have different slope. The significant difference is that two variables are different on bond and stock plan. If we assume two plans have same EBIT, a net income shows different value on two plans due to the interest expense of bond, which is 5.0 million dollar in every year till maturity. Another compounding that used to calculate EPS is outstanding shares that also differ on two plans. On bond plan, outstanding shares would be 4.5 million whereas for stock plan is 7.5 million. b. Why are EPS equal under the two plans at an EBIT of $12.5 million? Which plan would produce the higher EPS at $10 million? At $15 million? Although the stock and bond plans have a same EPS at an EBIT of $12.5 million, equation is different. The equation is shown below: Bond plan: EPS=(Net income-Dividends on preffered stock)/(Average outstanding shares)=$4'500'000/4'500'00=$1.0 Stock plan:EPS= $7'500'000/7'500'000=$1.0 According to the graph and equation, If EBIT increases above $12.5 million, bond plan will produce higher EPS because increasing debt affects to increase leverage. If EBIT decrease below $12.5 million, stock plan will produce higher EPS. Exact values are shown below. EBIT Bond Plan / EPS/ Higher Stock plan /EPS/ $10’000’000 $0.67...
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...Accounting for convertible bond issue. F 2. Reporting gain/loss on convertible debt retirement. T 3. Reporting additional payment to encourage conversion. F 4. Exercise of convertible preferred stock. F 5. Convertible preferred stock exercise. T 6. Allocating proceeds between debt and detachable warrants. F 7. Allocating proceeds from nondetachable warrants. T 8. Intrinsic value of a stock option. F 9. Compensation expense in fair value method. T 10. Service period in stock option plans. F 11. Accounting for nonexercise of stock options. F 12. Accounting for stock option forfeiture. T 13. Cumulative preferred stock and EPS. F 14. Restating shares for stock dividends and stock splits. T 15. Stock dividend and weighted-average shares outstanding. F 16. Preferred dividends and income before extraordinary items. T. 17. Reporting EPS in complex capital structure. F. 18. Dilutive stock options. T 19. Contingent issue shares. F 20. Reporting EPS for income from continuing operations. Multiple Choice—Dilutive Securities, Conceptual Answer No. Description d 21. Nature of convertible bonds. d 22. Recording conversion of bonds. b 23. Definition of bond sweetener. c S24. Reasons for issuing convertible debt. a S25. Reporting gain/loss on conversion of bonds. d S26. Accounting for conversion of preferred stock. b 27. Recording conversion of preferred stock. d 28. Bonds issued with detachable stock warrants. d 29. Debt equity...
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