SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the...

 

 

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SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs. Suppose SesameSweet declares a 3-for-1 stock split. If you owned 750 shares before the split, how many do you own after the split? You are the purchasing agent for a candy company. You anticipate that your firm will need 400,000 pounds of milk in March. You decide to hedge your position today and did so at the closing price of the day. Assume that the actual market price turns out to be 12.74 on the day you actually buy the milk. How much more would you have spent or saved if you had not taken the hedge position? Milk- 200,000 lbs.: cents. per lb. Open High Low Settle Chg Lifetime Lifetime Open High Low Interest Mar 12.53 12.79 12.33 12.78 .01 12.86 12.19 503 SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs. Suppose SesameSweet declares a 3-for-1 stock split. If you owned 750 shares before the split, how many do you own after the split? You are the purchasing agent for a candy company. You anticipate that your firm will need 400,000 pounds of milk in March. You decide to hedge your position today and did so at the closing price of the day. Assume that the actual market price turns out to be 12.74 on the day you actually buy the milk. How much more would you have spent or saved if you had not taken the hedge position? Milk- 200,000 lbs.: cents. per lb. Open High Low Settle Chg Lifetime Lifetime Open High Low Interest Mar 12.53 12.79 12.33 12.78 .01 12.86 12.19 503