CanaCo showed the following equity on its Dec ober 31, 120, balance sheets Contributed capital Preferred shares, $2 non-cumulative Authorized: 50,000 Issued and outstanding: 0. Common shares Authorized: Unlimited Issued and outstanding: 50,000. Total contributed capital. Retained earnings Total equity... $ 6,300,000 $ 6,800,000 3,800,000 $10,600,000 The shareholders of CanaCo expressed concerns to the board of directors at the recent annual meeting that the market price of their shares has not changed significantly over the past 18 months, yet the company is very profitable. Profit for each of the past three years has been $1,300,000, $2,300,000, and $3,500,000, respectively. Cash .dividends were paid in each of these years equal to 50% of profit Required Using the elements of critical thinking described on the inside front cover, comment. Consider the following subheadings to organize your response, and try to really think about the complexity of share prices. What really will affect share prices? . Problem Goal Principles Facts Activate Windows
CanaCo showed the following equity on its Dec ober 31, 120, balance sheets Contributed capital Preferred shares, $2 non-cumulative Authorized: 50,000 Issued and outstanding: 0. Common shares Authorized: Unlimited Issued and outstanding: 50,000. Total contributed capital. Retained earnings Total equity... $ 6,300,000 $ 6,800,000 3,800,000 $10,600,000 The shareholders of CanaCo expressed concerns to the board of directors at the recent annual meeting that the market price of their shares has not changed significantly over the past 18 months, yet the company is very profitable. Profit for each of the past three years has been $1,300,000, $2,300,000, and $3,500,000, respectively. Cash .dividends were paid in each of these years equal to 50% of profit Required Using the elements of critical thinking described on the inside front cover, comment. Consider the following subheadings to organize your response, and try to really think about the complexity of share prices. What really will affect share prices? . Problem Goal Principles Facts Activate Windows
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:CanaCo showed the following cquity on its December 31, 2020, balance sheet:
Contributed capital
Preferred shares, $2 non-cumulative Authorized: 50,000 Issued and outstanding: 0.
Common shares
Authorized: Unlimited Issued and outstanding: 50.000.
Total contributed capital.
6,300,000
$ 6,800,000
3,800,000
Retained earnings.
SI0.600.000
Total equity.
The shareholders of CanaCo expressed concerns to the board of directors at the recent annual mecting that the market price of their shares has not changed significantly
over the past 18 months, yet the company is very profitable. Profit for each of the past three years has been S1.800,000, S2,300,000, and $3,500.000, respectively. Cash
dividends were paid in each of these years equal to 50% of profit.
Required
Using the elements of critical thinking deseribed on the inside front cover, comment. Consider the following subheadings to organize your response, and try to really think
about the complexity of share prices. What really will affect share prices?
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