Sample3 question9:why should dividend be subtracted from asset calculation in equity method?According to schweser, dividend received will increase cash and decrease investment account by same amount, thus effect on asset will be offset. question6:UIP get 4%interest rate differential, but Braoque’s expectation is 5%. Why should it be consistent? Sample1 question4:annoucement said the firm makes mkt in the securities of NanoMem,which mean investment banking relationship.Why No for NanoMem then?
singlesong80 Wrote: ------------------------------------------------------- > Sample3 > > question9:why should dividend be subtracted from > asset calculation in equity method?According to > schweser, dividend received will increase cash and > decrease investment > account by same amount, thus effect on asset will > be offset. They are talking about the investment in S on your BS. If the subisidary pays out a dividend there is less cash in the sub, you must reduce your investment in the sub accordingly. If you don’t you will overstate the value of the company on your BS. > > question6:UIP get 4%interest rate differential, > but Braoque’s expectation is 5%. Why should > it be consistent? > > Sample1 > question4:annoucement said the firm makes mkt in > the securities of NanoMem,which mean investment > banking relationship.Why No for NanoMem then?