Question: 1 The Green Briar is an all-equity firm with a total market value of $418,000 and 20,000 shares of stock outstanding. Management is considering issuing $120,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities? A. 2,871 shares B. 3,516 shares C. 3,921 shares D. 4,607 shares E. 5,742 shares Question: 2 During its first year. Concord, Inc., showed a $21 per unit profit under absorption costing but would have reported a total profit of $16,800 less under variable costing. If production exceeded sales by 700 units and an average contribution margin of 60% was maintained, what is apparent? a. Fixed cost per unit? b. Sales price per unit? c. Variable cost per unit? d. Unit sales volume if total profit under absorption costing was $189,000?
Question: 1 The Green Briar is an all-equity firm with a total market value of $418,000 and 20,000 shares of stock outstanding. Management is considering issuing $120,000 of debt at an interest rate of 9 percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the firm repurchase if it issues the debt securities? A. 2,871 shares B. 3,516 shares C. 3,921 shares D. 4,607 shares E. 5,742 shares Question: 2 During its first year. Concord, Inc., showed a $21 per unit profit under absorption costing but would have reported a total profit of $16,800 less under variable costing. If production exceeded sales by 700 units and an average contribution margin of 60% was maintained, what is apparent? a. Fixed cost per unit? b. Sales price per unit? c. Variable cost per unit? d. Unit sales volume if total profit under absorption costing was $189,000?
Chapter15: Dividend Policy
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Question: 1
The Green Briar is an all-equity firm with a total market value of $418,000 and 20,000 shares of
stock outstanding. Management is considering issuing $120,000 of debt at an interest rate of 9
percent and using the proceeds on a stock repurchase. Ignore taxes. How many shares will the
firm repurchase if it issues the debt securities?
A. 2,871 shares
B. 3,516 shares
C. 3,921 shares
D. 4,607 shares
E. 5,742 shares
Question: 2
During its first year. Concord, Inc., showed a $21 per unit profit under absorption costing
but would have reported a total profit of $16,800 less under variable costing. If production
exceeded sales by 700 units and an average contribution margin of 60% was maintained,
what is apparent?
a. Fixed cost per unit?
b. Sales price per unit?
c. Variable cost per unit?
d. Unit sales volume if total profit under absorption costing was $189,000?
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