ABC Corporation has total shareholder equity of $150,000 at year end. The company needs to pay $30,000 to its preferred stockholders. If ABC has issued 40,000 common shares, what is the book value per share?
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Book value per share solution general accounting question
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- a) You currently own 600 shares of JKL, Inc. JKL is an all-equity firmthat has 75,000 shares of stock outstanding at a market price of $40a share. The company’s earnings before interest and taxes are $140,000.JKL has decided to issue $1 million of debt at 8 percent interest.This debt will be used to repurchase shares of stock. How many sharesof JKL stock must you sell to unlever your position if you can loanout funds at 8 percent interest?b) If the cost of equity is 25%, the WACC is 16% and cost of debt is 10%,what will be the implied D/E ratio?c) Why is financial leverage considered as a fair-weather friend? (Max50 words) Give a step by step break down of the answerThe owner equity accounts for Masterson International are shown here Common stock (of $1 par value)- $45,000 Capital surplus- -$157,000 Retained earnings- $603,000 Total owners’ equity- $805,000 If the company’s stock currently sells for $42 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.Hi, If a company has 32,000 common stock shares outstanding $10 par value, then purchases 2,300 shares of treasury stock at $25 per share. How would this be jouralized? Also, after those transaction the same company declared a $0.10 per share cash dividend on the common stock outstanding. How would this be jouralized?
- XYZ Corporation issued 1,000 shares of common stock with a par value of $10 per share. If the company received $15 per share from the issuance, what is the total amount of additional paid-in capital?You currently own 1,100 shares of JKL, Inc. JKL is currently an all equity that has 900,000 shares of stock outstanding at a market price of $30 a share. The company's earnings before interest and taxes are $5,400,000. JKL recently decided to issue $2,700,000 of debt at 5 percent interest. This debt will be used to repurchase shares of stock. Ignore taxes and answer the following two questions: Part A: What is JKL's target debt to asset ratio? 20 % Part B: How many shares of JKL stock must you sell to undo the leverage? Assume that you can loan out those funds at 5 percent interest. 220 xAmerican Health Systems has 5,600,000 shares of stock outstanding and will report earnings of $17 million in the current year. The company is considering the issuance of 1,300,000 additional shares, which can only be issued at $21 per share. a. Assume that American Health Systems can earn 4 percent on the proceeds. Calculate earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share b. Should the new issue be undertaken based on earnings per share? O Yes O No 10 B Next >
- Suppose that you own 3,400 shares of Nocash Corp. and the company is about to pay a 25% stock dividend. The stock currently sells at $125 per share. a. What will be the number of shares that you hold after the stock dividend is paid? (Do not round intermediate calculations.) Number of shares b. What will be the total value of your equity position after the stock dividend is paid? (Do not round intermediate calculations.) Total value c. What will be the number of shares that you hold if the firm splits five-for-four instead of paying the stock dividend? (Do not round intermediate calculations.) Number of shares heldZyra Company is conducting an initial public offering of 2,500,000 shares. Zyra Company already had 4,000,000 issued and outstanding shares, The new IPO shares shall be sold at P3 per share. What is the tax on initial public offering?Assume the issuer incurs $1 million in otherexpenses to sell 3 million shares at $40 each to anunderwriter and the underwriter sells the shares at$43 each. By the end of the first day’s trading, theissuing company’s stock price had risen to $70.What is the total cost of underpricing?
- The Hamilton Corporation has 4 million shares of stock outstanding and will report earnings of $6,360,000 in the current year. The company is considering the issuance of 2 million additional shares that can only be issued at $38 per share. a. Assume the Hamilton Corporation can earn 7.00 percent on the proceeds. Calculate the earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share b. Should the new issue be undertaken based on earnings per share? O Yes O No Prev 1 of 10 Next >Vespa, PLC has 63,000 shares outstanding. If the market capitalization of the company is $315,000, how much does each share cost? 315,000 / 63,000 = 34Company S has 4,000 shares outstanding and a total stockholders’ equity of $200,000. It is about to issue 6,000 new shares to the prospective parent company. The shares will be sold for a total of $650,000. Will there be an excess of cost over book value? If so, how will it likely be accounted for?