es Myers Drugs Inc. has 3 million shares of stock outstanding. Earnings after taxes are $6 million. Myers also has warrants outstanding that allow the holder to buy 100,000 shares of stock at $10 per share. The stock is currently selling for $50 per share. a. Compute basic earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Basic earnings per share b. Compute diluted earnings per share considering the possible impact of the warrants. Assume the cash proceeds are used to repuchase shares. (Do not round intermediate calculations and round your answer to 2 decimal places.) Use the following formula: Earnings after taxes Shares outstanding + Assumed net increase in shares from the warrants Diluted earnings per share

es Myers Drugs Inc. has 3 million shares of stock outstanding. Earnings after taxes are $6 million. Myers also has warrants outstanding that allow the holder to buy 100,000 shares of stock at $10 per share. The stock is currently selling for $50 per share. a. Compute basic earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Basic earnings per share b. Compute diluted earnings per share considering the possible impact of the warrants. Assume the cash proceeds are used to repuchase shares. (Do not round intermediate calculations and round your answer to 2 decimal places.) Use the following formula: Earnings after taxes Shares outstanding + Assumed net increase in shares from the warrants Diluted earnings per share

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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Griffins Goat Farm, Inc., has sales of $670,000, costs of $332,000, depreciation expense of $76,000, interest expense of $48,000, a tax rate of 23 percent, and paid out $45,000 in cash dividends. The firm has 27,800 shares of common stock outstanding. a. What are the earnings per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are the dividends per share figure? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Earnings per share b. Dividends per share
(Estimated time allowance: 3 minutes) The following information is from a partial view of the balance sheet of a company. Compute the cost of preferred equity/stock. Preferred stock: 10% preferred with a current price of $90. The par value of preferred stock is $60. There are 80,000 shares of the preferred stock outstanding. The tax rate is 20%. What is the cost of preferred equity (Rp)? For your answer, use percentage denomination and only use ONE decimal; do not enter the % sign. For example, if your final calculation results in 0.24576 then enter 24.6; if your final calculation results in 0.04233 then enter 4.2; if your final calculation results in 0.20 then enter 20.0
The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share×total shares outstanding) of $1,332,000. Furthermore, the firm's income statement for the year just ended has a net income of $523,000, which is $0.251 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 21.18. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares?
Bolton Corporation had additions to retained earnings for the year just ended of $248,000. The firm paid out $187,000 in cash dividends, and it has ending total equity of $4.92 million. The company currently has 150,000 shares of common stock outstanding. a. What are earnings per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What are dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the stock currently sells for $80 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) e. What is the price-earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) f. If the…
Question a Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
The shares of the Dyer Drilling Co. sell for $50. The firm has a P/E ratio of 10. Eighty percent of earnings is paid out in dividends. What is the firm's dividend yield? (Do not round your intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Dividend yield %
The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share\times total shares outstanding) of $1,358,000. Furthermore, the firm's income statement for the year just ended has a net income of $577, 000, which is $ 0.321 per share of common stock outstanding. The price - earnings ratio for firms similar to Underwood Motors is 21.33. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares?
(Market value analysis) The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share x total shares outstanding) of $1,381,000. Furthermore, the firm's income statement for the year just ended has a net income of $565,000, which is $0.265 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 19.57. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares? a. What price would you expect Underwood Motors shares to sell for? The market price per share is $ (Round to the nearest cent.)
n Tina Black's Fabrics is currently an all equity firm that has 15,000 shares of stock outstanding at a market price of $12.50 a share. Company management has decided to issue $60,000 worth of debt and use the funds to repurchase shares of the outstanding stock at the market price. The interest rate on the debt will be 7%. Ignoring taxes, what is the earnings per share (EPS) at the break-even level of earnings before interest and taxes (EBIT)? O A. O B. O D. $1.143 O C. $1.500 SOE. $1.125 $0.875 $0.667 27/
NFG investment company that has 4 million shares outstanding has total assets of $62 million and total liabilities of $12 million. If this investment company charges a load of 3.5%, how much would an investor have to pay to purchase one share? . (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
Enterprise Storage Company has 450,000 shares of cumulative preferred stock outstanding, which has a stated dividend of $8.75. It is six years in arrears in its dividend payments. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.a. How much in total dollars is the company behind in its payments? (Do not round intermediate calculations. Input your answer in dollars, not millions (e.g., $1,234,000).) Dividend in arrears b. The firm proposes to offer new common stock to the preferred stockholders to wipe out the deficit. The common stock will pay the following dividends over the next four years: D1 $ 1.20 D2 1.30 D3 1.40 D4 1.50 The company anticipates earnings per share after four years will be $4.10 with a P/E ratio of 11.The common stock will be valued as the present value of future dividends plus the present value of the future stock price…
Dove, Inc., had additions to retained earnings for the year just ended of $635,000. The firm paid out $80,000 in cash dividends, and it has ending total equity of $7.30 million. a. If the company currently has 670,000 shares of common stock outstanding, what are earnings per share? Dividends per share? What is book value per share? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If the stock currently sells for $30.00 per share, what is the market-to-book ratio? The price-earnings ratio? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. If total sales were $10.6 million, what is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. b. C. Earnings per share Dividends per share Book value per share Market-to-book ratio Price-earnings ratio Price-sales ratio times times times

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