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 ?

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 ?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

9-16. (Weighted average cost of capital) The capital structure for the ABC Corporation is provided below. The company plans to maintain its debt structure in the future. Tf the firm has a 7 percent after-tax cost of debt, a 12.5 percent cost of preferred stock, and a 20 percent cost of common stock, what is the firm's weighted average cost of capital? CAPITAL STRUCTURE (€000) Bonds €2,100 Preferred stock 350 Common stock 3,400 Total €5,850
D6)
3) A company entirely financed with equity has 1,800,000 shares outstanding and decides to issue new shares with subscription rights. The price of shares before the issuance was 42 euro, and the price at which the shares are issued is 38 euro. If the price after the share issuance is going to be 40 euro, determine the number of subscription rights that a shareholder needs to buy one new share in the issuance with subscription rights.
The total market value of the common stock of Company A is $12 million, and the total value of its debt is $8 million. The treasurer estimates that the beta of the stock is currently 1.20 and that the market risk premium is 7.5%. The Treasury bill rate is 2.5%. Assume for simplicity that Company A debt is risk-free. The Company's tax rate is 28% . a) What is the pre-tax cost of capital for Company A? b) What is the WACC for Company A ?
Byrd Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 185,000 shares of stock outstanding. Under Plan II, there would be 135,000 shares of stock outstanding and $1.92 million in debt outstanding. The interest rate on the debt is 7 percent and there are no taxes. a. Use MM Proposition I to find the price per share. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the value of the firm under each of the two proposed plans? ((Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) a. Share price b. All equity plan Levered plan
Xavier Manufacturing Company has determined its optimal capital structure, which is composed of the following sources and target market value proportions: Target Market - Source of Capital Proportions Long-term debt 35% Preferred stock 5% Common stock equity 60% Debt: The firm plans to issue a 20-year, $1,000 par value, 6%(percent) bond. A flotation cost of 3% (percent) of the face value would be required. Preferred Stock: The firm has determined it can issue preferred stock at $70 per share par value. The stock will pay an $8.00 annual dividend. The cost of issuing and selling the preferred stock will be $3 per share. Common Stock: The firm’s common stock is currently selling for $40 per share. The dividend expected to be paid at the end of the coming year is $5.00. Its dividend payments have been growing at a constant rate for the last five years at a rate of 5%. In order to assure that the new stock issuance will sell,…
Trapper Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 160,000 shares of stock outstanding. Under Plan II, there would be 110,000 shares of stock outstanding and $1.4 million in debt outstanding. The interest rate on the debt is 7 percent, and there are no taxes. a. If EBIT is $400,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)b. If EBIT is $650,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)c. What is the break-even EBIT? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567.
4. You are a member of the finance staff of Orange Ltd, whose share are listed on London Stock Exchange. You have been asked to derive a weighted average cost of capital (WACC) for use in assessing a major investment in a training facility. The business’s financial statement as at 31 December 2021 shows that it has the following long-term financial capital structure: Redeemable Debt: 5,000 redeemable debts of £100 each with 12% coupon rate Preference Shares: 46,000 shares with 9% dividend rate and a par value of £10 Ordinary shares: 0.5 million shares of £1 each On 31 December 2021, the 12% redeemable debt is traded at £114 (ex-interest). It will be redeemable at par on 31 December 2022. Interest on the debt is payable annually on 31 December. On 31 December 2021, the market price of the company’s 9% preference shares is £13.5 (cum-dividend). On 31 December 2021, the ordinary shares are quoted at £1.21 each. The ordinary shareholders will receive a 7p annual dividend per share very…
Dream Corp is comparing two different capital structures: an all-equity plan (Plan A) and a levered plan (Plan B). Under Plan A, the company would have 160,000 shares of stock outstanding. Under Plan B, there would be 80,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest on debt is 5. 8%. If EBIT is $350,000 which plan will result in the higher EPS? If EBIT is $600,000 which plan will result in the higher EPS? What is the break-even EBIT for the two plans? Please interpret what the break-even EBIT you find means. What is meant by business risk and financial risk? Explain this statement: "The optimal capital structure for a firm is 50% debt and 50% equity." а. b. с. d. е.
GPR is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, GPR would have 178,500 shares of stock outstanding. Under Plan II, there would be 71,400 shares of stock outstanding and $1.79 million in debt outstanding. The interest rate on the debt is 10 percent and there are no taxes. The projected EBIT is $280,000. Which capital structure plan would you prefer, if you were a shareholder in the firm? Support your response with relevant computations
47. A cooperative has a net surplus of P10M for the fiscal year 2018. How much should be given to the members in the form of dividends or interest on their share capital? Group of answer choices At least P1,000,000 At least P2,000,000 At least P2,500,000 At least P5,000,000
2. A company has share capital of Kshs 20 million and is planning to invest an additional fund of Kshs 16,000,000 towards its expansion programme. Suggest the best option from the following, from a tax point of view: 1. To issue share capital of Kshs 16,000,000. 2. To borrow Kshs 4,000,000 @ 18% pa and to issue debentures of Kshs 4,000,000 @ 11% pa and the balance amount be collected by issuing shares in the public. 3. To issue debentures for Kshs 10,000,000 @ 11% pa and the balance be collected by issuing shares in the public. 4. Rate of return is 30% before paying any interest and tax. Rate of tax is 30%