What is the net advantage to leasing

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Questions -

Q1. You speculate in the market by selling 8 gold futures contracts when the futures price ls $556 60 per ounce. The price on the contract maturity date is $557.20. What is your total profit (loss) if the contract size is 100 ounces?

Q2. RAY Corporation currently has 500, 000 shares outstanding that sell for $25 each. What will the share price be after:

1. RAY has a 2 for 1 stock split?

2. Ray has a 15% stock dividend?

3. Ray has a 2 for 5 reverse stock split?

Q3. Your company is considering the purchase of a fleet of cars for $195,000. It can borrow at 8.5%. The cars will be used for four years. At the end of four years they will be worthless. You call a leasing agent and find that the cars can be leased for $55,000 per year paid at the beginning of the year. The corporate tax rate is 34% and the cars belong in 30% class. What is the net advantage to leasing?

Reference no: EM133173001

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