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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- Abc corporation has total shareholdersNational Power has 1020000 shares outstanding. Each share sells for $25. The company wants to raise $5100000 in new equity. Suppose the exercise (subscription) price is set at $15 per share. Calculate the Number of Shares per Right.Suppose that you own 2,700 shares of Nocash Corp. and the company is about to pay a 15% stock dividend. The stock currently sells at $110 per share.What will be the number of shares that you hold after the stock dividend is paid?
- 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 answerWhat is the total par value of the issued shares of this financial accounting question?The 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.
- Jimmy Shoes Inc. has 10,000 shares outstanding with a stock price of $40 per share. The current weighted average cost of capital is 7%. It also carries long-term debt of $200,000 at an interest rate of 7% p.a. One of the agenda items in its AGM is to switch to a D/E of 1. Based on this information, answer the following questions: a) What will be the number of outstanding shares for Jimmy Shoes Inc. if it switches to a D/E ratio of 1? (Hint: Current Debt = $200,000, current equity = 10,000 shares x $40 = $400,000, current D/E = 2/4 = 0.5/1. If the firm seeks to increase its D/E to 1, it can think of borrowing more)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?Jimmy Shoes Inc. has 10,000 shares outstanding with a stock price of $40 pershare. The current weighted average cost of capital is 7%. It also carrieslong-term debt of $200,000 at an interest rate of 7% p.a. One of the agendaitems in its AGM is to switch to a D/E of 1. Based on this information,answer the following questions:a) What will be the number of outstanding shares for Jimmy Shoes Inc. ifit switches to a D/E ratio of 1? (Hint: Current Debt = $200,000,current equity = 10,000 shares x $40 = $400,000, current D/E = 2/4 =0.5/1. If the firm seeks to increase its D/E to 1, it can think ofborrowing more)b) What is the level of EBIT at which shareholders will be indifferentbetween the two capital structures, the one with a D/E = 0.5/1 and theother with a D/E of 1?
- 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 heldBernard Corporation wants to obtain P4 million in its first public issue of common stock. After the issuance, the total market value of a stock is estimated at $10 million. At present, there are 120,000 closely-held shares. REQUIREMENTS: (a) What is the amount of new shares that must be issued to obtain the P4 million? (b) After the stock issuance, what will be the expected price per share?Damron, Incorporated, has 205,000 shares of stock outstanding. Each share is worth $79, so the company’s market value of equity is $16,195,000. Suppose the firm issues 44,000 new shares at the following prices: $79, $73, and $67. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share?