MGT120H5 Lecture Notes - Celestica, Mccain Foods, Market Liquidity
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MGT120H5 Full Course Notes
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Cashed within 12 months of date ! Company have extra money on hand ! (marketable securities) are investments that a company plans to hold for one year or. Bought shares of another company (hold on to less than one year) ! Are the most liquid asset after cash. Suppose that celestica inc. purchases mccain foods ltd. shares on dec. 18, paying. On dec. 27, celestica receives a cash dividend of ,000 from mccain. Dividend revenue is considered other revenues* ! Celestica scal year ends on dec. 31, and the investment in mccain has a current market value of ,000 on this date. Gain: because the market value (,000) is greater than celestica"s investment cost! Gain = ,000 (unrealized - because the shares have not been sold, it means the cost of the shares have changed) ! If the celestica investment in mccain shares had decreased in value to ,000! Unrealized loss because celestica has not yet sold the investment!
