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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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Answer the following question correctly and show your Complete Solution (Given, Required, Equation, Solution, Answer). KWARTA Corporation declared a 10% dividend on a stock with a par value of Php 800.00. Mr. Quiton owns 250 shares. How much is the dividend he received? A. Php 5,000.00 B. Php 10,000.00 C. Php 15,000.00 D. Php 20,000.00
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…
David's Watersports Firm is considering a public offering of common stock. Its investment banker has informed the company that the retail price will be $16.85 per share for 550,000 shares. The company will receive $15.40 per share and will incur $180,000 in registration, accounting, and printing fees. A. What is the spread on this issue in percentage terms? What are the total expenses of the issue as a percentage of total value (at retail)? B. If the firm wanted to net $15.99 million from this issue, how many shares must be sold?
Gulf Shores Inn is comparing two separate capital structures. The first structure consists of 340,000 shares of stock and no debt. The second structure consists of 300,000 shares of stock and $2.10 million of debt. What is the price per share of equity? Multiple Choice O $64.62 $52.50 $55.00 $67.85 $60.00
Benkart Corporation has sales of \$5,000,000 , net Income of 800,000, total assets of \$2,000,000 , and 100, 000 shares of common stock Outstanding. If Benkart's stock price $96 per share, what is the company's P/E ratio?
Yale Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of P200, and 100 shares of stock. QUESTIONS:a. What is Yale's estimated intrinsic stock price? b. If Yale's converts its short-term investments to cash and pays a total of P100 in dividends, what is the resulting estimated intrinsic stock price? c. If Yale converts its short-term investments to cash and repurchases P100 of its stock, what is the resulting estimated intrinsic stock price and how many shares remain outstanding?
The authorized capital stock of Quarantine Corporation is P50,000,000 and the par value per share is P20. To get the approval of the Securities and Exchange Commission, the minimum paid-up capital should amount to ?
Dickson Corporation is comparing two different capital structures. Plan I would result in 18,000 shares of stock and $95,000 in debt. Plan II would result in 14,000 shares of stock and $190,000 in debt. The interest rate on the debt is 5 percent. Assume that EBIT will be $90,000. An all-equity plan would result in 22,000 shares of stock outstanding. Ignoring taxes, what is the price per share of equity under Plan I? Plan II? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Plan I Plan II
The public subscribers of 50,000 shares of a company of Rs 200 each . The company calls up Rs 100 per share but receive the payment only from 10,000 subscribers . Calculate : 1 . Subscribed capital 2 . Called up capital 3 . Paid up capital
2. If RTM's stock is currently trading at AED 24 and RTM has 25 million shares outstanding, shareholder equity of 100 million and cash of 5 million, What is the RTM's market-to-book ratio, the market capitalization and the enterprise value.
2. You purchase 600 shares of Jenkins Corporation at $30 per share using an initial margin of 70%. The stock is now selling for $41 per share and you want to use the excess equity in your account to pyramid. You want to purchase 400 shares of Watson Corporation at $122 per share. If the minimum initial margin is 60%, what is the minimum amount of equity that you will have to put up in this transaction?
BK Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of P200, and 100 shares of stock. If BK converts its short-term investments to cash and repurchases P100 of its stock, what is the resulting estimated intrinsic stock price and how many shares remain outstanding?

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