entry for each problem. 1. Alpha Corporation’s 10,000 common stock of P100 par value are sold at P150 per share. 2. Bravo Co. sells 20 of the 100 shares of its treasury stock for P130 per share. The cost of each treasury share is P120. 3. Charlie Co. sells 40 of the 200 shares of its treasury stock for P120 per share. The cost of each treasury share is P150. 4. Delta Corporation has 5,000

entry for each problem. 1. Alpha Corporation’s 10,000 common stock of P100 par value are sold at P150 per share. 2. Bravo Co. sells 20 of the 100 shares of its treasury stock for P130 per share. The cost of each treasury share is P120. 3. Charlie Co. sells 40 of the 200 shares of its treasury stock for P120 per share. The cost of each treasury share is P150. 4. Delta Corporation has 5,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 12P

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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?
Suppose a company purchases 2,000 shares of its own $1 par value common stock for $16 per share. The company then resells 400 of these shares for $20 per share. Which of the following is recorded at the time of the resale? a. Credit Common Stock for $400. b. Credit Treasury Stock for $8,000. c. Credit Common Stock for $8,000. d. Credit Additional Paid-In Capital for $1,600.
what journal entry would be made for the following transaction? highway studios sells 10 million of its no-par common shares for $10 per share.
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On October 1, you sold short 100 shares of Wayne stock at $25 per share. On December 1, a dividend of $3 per share was paid. On Jan 1, you covered the short sale by buying the stock at a price of $15 per share. You paid 50 cents per share in commissions for each transaction i.e. for each trade. What is the net gain of the short sale? (Show work for partial credit) O $2500 O $1500 $1200 $1150 O $1100
Your company, Ohiobucks (OB), hires an investment bank to underwrite an issue of 10 million shares of OB stock on a best-effort basis. The investment bank sells 8 million shares and charges OB $0.225 per share sold. The price of each share is $10.50. How much will the investment bank earn after the issuance? A. $7.0 MM B. $7.5 MM C. $1.8 MM D. $1.0 MM
On January 1, Star Corp sold 10,000 shares of stock at $26 per share. Later in the year, Star Corp acquired all the shares from the market paying $28 per share. Assuming the cost method is used, what is the debit to common stock from this transaction? (Lesson 12.3) (If you do not know this JE. you should review it.) O a.so Ob. $260,000 OC. $20,000 d.$280.000
ABC purchases 118 shares of XYZ company at $38 per share in its margin account. ABC finances part of the purchase by borrowing $1967 at a rate of 9% per year. One year later the price of XYZ shares has changed by 22%. Therefore the return earned by ABC in its marging account is % (Negative amounts should be indicated by a minus sign. Round your answer to 2 decimal places, e.g. 110.10)
mni.3
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Pandora Box Company Inc. makes a rights issue at a subscription price of $5 a share. One new share can be purchased for every five shares held. Before the issue there were 15 million shares outstanding and the share price was $12. a. What is the total amount of new money raised? (Do not round intermediate calculations. Enter your answer in millions.) b. What is the expected stock price after the rights are issued? (Enter your answer rounded to 4 decimal places.) c. By what percentage would the total value of the company need to fall before shareholders would be unwilling to take up their rights? (Do not round intermediate calculations. Enter your answer as a positive percent rounded to 2 decimal places.) d. Suppose that you initially own 100 shares plus $100 in the bank. If you take up your rights issue, what will be your total wealth after the issue is completed? (Do not round intermediate calculations. Enter your answer rounded to nearest whole dollar.) e. Suppose that the company…
MOL Company has P200,000 available to pay dividends. It has 12,000 10% preference shares (of which, 300 shares are in the treasury), P100 par and 50,000 ordinary shares with a par of P40. The preference share is selling for P125 and the ordinary share is selling at P50 per share. Required: Determine the amount of dividends and dividends per share to be paid to each class of share for each of the following independent assumptions. - Preference share capital is non-participating and non-cumulative. - Preference share capital is non-participating and cumulative. Preference dividends are two years in arrears at the beginning of the year. - Preference share capital is fully participating and cumulative. Preference dividends are one year in arrears at the beginning of the year. - Preference share…