QR 2-7 Tech Template

Preferred stock Par value Sale price Flotationcost Annual dividend   A  $            100  $            101  $           9.00 11%   B                  40                  38  $           3.50 8%   C                  35                  37  $           4.00  $           5.00   D                  30                  26 5% of par  $           3.00   E                  20                  20  $           2.50 9% Stock B     Par value    $              40 Sale price    $              38 Flotation cost    $           3.50 Annual dividend 8% Dividend payment   Proceed from sale   Cost of preferred stock   By using cell references  calculate the dividend payment of preferred Stock B. By using cell references calculate the proceeds from sale of referred stock B. By using cell references calculate the cost of preferred stock B.

Preferred stock Par value Sale price Flotationcost Annual dividend A  $            100  $            101  $           9.00 11% B                  40                  38  $           3.50 8% C                  35                  37  $           4.00  $           5.00 D                  30                  26 5% of par  $           3.00 E                  20                  20  $           2.50 9% Stock E     Par value    $              20 Sale price    $              20 Flotation cost    $           2.50 Annual dividend 9% Dividend payment   Proceed from sale   Cost of preferred stock   By using cell references to the given data calucalte the dividend payment of preferred stock E. By using cell references to the given data calculate the proceeds from sale of preferred stock E. By using cell references to the given data calculate the cost of preferred stock E.

Preferred stock Par value Sale price Flotationcost Annual dividend A  $            100  $            101  $           9.00 11% B                  40                  38  $           3.50 8% C                  35                  37  $           4.00  $           5.00 D                  30                  26 5% of par  $           3.00 E                  20                  20  $           2.50 9% Stock C     Par value    $              35 Sale price    $              37 Flotation cost    $           4.00 Annual dividend  $           5.00 Proceed from sale   Cost of preferred stock   By using cell references to the given data calculate the proceeds from sale of preferred stock C. By using cell references to the given data calucalte the cost of preferred stock C.

Preferred stock Par value Sale price Flotationcost Annual dividend   A  $            100  $            101  $           9.00 11%   B                  40                  38  $           3.50 8%   C                  35                  37  $           4.00  $           5.00   D                  30                  26 5% of par  $           3.00   E                  20                  20  $           2.50 9%             Solution                         Stock A           Par value    $            100       Sale price    $            101       Flotation cost    $           9.00       Annual dividend 11%         Dividend payment           Proceed from sale           Cost of preferred stock         by using cell references to the given data, calculate the dividend payment of preferred stock A

Preferred stock Par value Sale price Flotationcost Annual dividend     A  $            100  $            101  $           9.00 11%     B                  40                  38  $           3.50 8%     C                  35                  37  $           4.00  $           5.00     D                  30                  26 5% of par  $           3.00     E                  20                  20  $           2.50 9%                 Solution                             Stock A             Par value    $            100         Sale price    $            101         Flotation cost    $           9.00         Annual dividend 11%           Dividend payment             Proceed from sale             Cost of preferred stock                         By using cell references calcualte the cost of preferred stock A

Preferred stock Par value Sale price Flotationcost Annual dividend   A  $            100  $            101  $           9.00 11%   B                  40                  38  $           3.50 8%   C                  35                  37  $           4.00  $           5.00   D                  30                  26 5% of par  $           3.00   E                  20                  20  $           2.50 9%             Solution                         Stock A           Par value    $            100       Sale price    $            101       Flotation cost    $           9.00       Annual dividend 11%         Dividend payment           Proceed from sale           Cost of preferred stock                     By using cell references to the given data calculate the proceeds from sale of preferred stock A

Target Share Price Takeover Premium Acquirer Share Price Target Shares Outstanding Acquirer Shares Outstanding Given the data in the above table, calculate the share exchange ratio: 0.46 1.12 2.62 4.19 $15.50 10% $6.50 300 700

Problem #2 Share Dividends Assume the following data: Ordinary Shares, P100 par value, 50,000 shares issued P5,000,000 Share Premium 200,000 2,000,000 Retained Earnings Market Value-declaration date 150 Market Value-distribution date 170 Required: For each of the following assumptions, prepare entries on the date of declaration and date of рayment: 1. A 20% share dividends is declared on ordinary shares. 2. A 10% share dividends is declared on ordinary shares.

a. Expected return b. Price per share d. New share price e-1. Shares repurchased e-2. New shares outstanding g. Required return $ $ G 15.43 % 34.68 37.08 %

10-7 What is the geometric average return of a stock with the following share price history? Year Share price 1 $20 2 $22 3 $24 4 $26 5 $28 Select one: a. 9.09% b. 8.78% c. 8.33% d. 7.69% e. 6.48%