urces280Question 1Assume a company had 500,000 shares of stock outstanding that were trading at $20 a share. If the company did a 2-for-1 stocksplit, how many shares will be outstanding after the split?O 250,000O 1,000,000O.500,000O 20Question 2If the company's stock was $40 per share and they did a 2-for-1 reverse stock split. How much is the stock worth now?O unable to determineO $40O $80O $20TiAm18

Split of Shares/Stock:When an organization splits the shares, it increases the number of shares of…

Answered: Question 1 Assume a company had 500,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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11. short-selling. P>$2 150% of market value Increasing amounts for lower valued shares Client wants to sell 1,000 shares of ABC at $5 (1) what is the minimum margin required? (2) if the stock price increases to $6, how much money should the client put into the account? (3) if the stock price drops to $4 from $5, how much money does the client make or lose?
M2
Question 1: Suppose you own 100 shares of General Motors stock, and the company earned $6 per share during the last reporting period. Suppose also that GM could either pay all of its earnings out as dividends (in which case you would receive $600) or retain the earnings in the business, buy more assets, and cause the price of the stock to increase by $6 per share (in which case the value of your stock would rise by $600). a. How would the tax laws influence what you, as a typical stockholder, would want the company to do? b. Would your choice be influenced by how much other income you had? Why might the desires of a 35-year-old doctor differ with respect to corporate dividend policy from the desires of a retiree living on a small income? c. How might the corporation’s decision with regard to the dividends it pays influence the price of its stock?
Give typing answer with explanation and conclusion A share of common stock is paying $3.50 per share, but the corporation only pays 40% of its earnings as cash dividends. The anticipated growth of this stock is 8%. Find the value of this stock if an investor wants a yield of 10%. If the stock is selling for $45, what is the expected yield?
Suppose a stock pays shareholders $100/year in dividends. The stock is to be held for 10 years. How much will an investor be willing to pay for the stock at 10% interest, if the investor is certain that the company will go bankrupt after 10 years (i.e., the stock will be worthless and no further dividends will be paid)? O A. $1,000 O B. $514 O C. $1,594 O D. $16 OE. $614
Ab. 127.
11) The stock of JFINEX Corporation is currently selling for 80 per share. It completed an 8 for 2 stock split two days earlier. Last year, JFINEX had a 3 for 6 reverse stock split. What was the stock price before the split and reverse split Happened?" A) 160 B) 10 C) 40 D) 640 E) None of the above
None
1. Discuss the implication of share Buybacks and Stock Options on the value of a company? 2. Discuss what recommendations you would have for a company like Bed, Bath, & Beyond, who spent 100's of millions of dollars on Share buybacks, which resulted them going bankrupt.
- Assume that six months ago you bought 2,500 shares of a stock at $70 per share using a margin. The margin rate was 40% and the interest rate on the margin loan was 8%. Assume no commissions. What is your gain or loss if the current stock price is $71 per share? A. -$1,700 B. $2,500 C. $6,700

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