The balance sheet for Tempest, Ic., Is shown here in market value terms. There are25,000 shares of stock outstanding.Market Value Balance Sheet$ 175,000570,000CashFixed assetsEquity$745,000Total$745,000Total$745,000The compay has announced It is going to repurchase $22,500 worth of stock Instead ofpaying a dividend of $.90.a. What effect will this transaction have on the equity of the firm? (Input the answer aspositive value. Do not round Intermedlate calculations and round your answer tothe nearest whole number, e.g., 32.)b. How many shares will be outstanding after the repurchase? (Do not roundIntermedlate calculatlons and round your answer to the nearest wholenumber, e.g., 32.)c. What will the price per share be after the repurchase? (Do not round Intermedlatecalculatlons and round your answer to 2 decimal places, e.g., 32.16.)a. The transaction willshareholders' equity byb. New shares outstandingC.Share price

Number of shares outstanding = 25,000 Equity = 745,000 Cash = 175,000 Fixed Assets = 570,000…

The balance sheet for Tempest, Inc., Is shown here in market value terms. There are 25,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 175,000 570,000 Equity Fixed assets $745,000 Total $745,000 Total $745,000 The compay has announced It is golng to repurchase $22,500 worth of stock Instead of paying a dividend of $.90. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) b. How many shares wll be outstanding after the repurchase? (Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) c. What will the price per share be after the repurchase? (Do not round Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) a. The transaction will b. New shares outstanding c. Share price |shareholders' equity by

The balance sheet for Tempest, Inc., Is shown here in market value terms. There are 25,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 175,000 570,000 Equity Fixed assets $745,000 Total $745,000 Total $745,000 The compay has announced It is golng to repurchase $22,500 worth of stock Instead of paying a dividend of $.90. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) b. How many shares wll be outstanding after the repurchase? (Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) c. What will the price per share be after the repurchase? (Do not round Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) a. The transaction will b. New shares outstanding c. Share price |shareholders' equity by

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

See similar textbooks

Similar questions

p/ 102. Down River Express has 5,000 shares of stock outstanding with a par value of $1.00 per share. The current market value of the firm is $390,000. The balance sheet shows a paid in surplus account value of $122,000 and retained earnings of $216,000. The company just announced a 2-for-1 stock split. What will the paid in surplus account balance be after the split?  A. $61,000 B. $112,000 C. $122,000 D. $183,000 E. $244,000
The Liang Company's balance sheet has the following capital section. Liang's stock is currently selling for $5 per share. Common Stock (50,000 shares at $1 par) $50,000 Capital in Excess of Par 50,000 Retained Earnings 100,000 $200,000 If Liang declared a 10% stock dividend instead of doing the stock split, what would the relevant section of the balance sheet look like?
Executive Chalk is financed solely by common stock and has outstanding 25 million shares with a market price of $10 a share. It now announces that it intends to issue $160 million of debt and to use the proceeds to buy back common stock. a. How is the market price of the stock affected by the announcement? b. How many shares can the company buy back with the $160 million of new debt that it issues? Note: Enter your answer in millions. c-1. What is the market value of the firm (equity plus debt) after the change in capital structure? Note: Enter your answer in millions. c-2. Did the market value of the firm change? d. What is the debt ratio after the change in structure? Note: Round your answer to 2 decimal places. e. Who (if anyone) gains or loses? a. Effect on market price b. Shares repurchased c-1. Market value c-2. Did the market value of the firm change? d. Debt ratio e. Who (if anyone) gains or loses? Stock price remains the same. 160 million 250 million $ No 1.78 No one gains or…
Xtel Inc. with a total market value of $630 million has $30 million in excess cash and no debt. Xtel has 1 million shares outstanding. Xtelʹs board is meeng to decide whether to pay out its $30 million in excess cash as a special dividend or to use it to repurchase shares of the firm’s stock. You own 1,000 shares of Xtel stock. Assume that Xtel uses the entire $30 million to repurchase shares. You are unhappy with Xtelʹs decision and would prefer that Xtel used the excess cash to pay a special dividend. As a result, you decide to create a “homemade” dividend. What is the number of shares that you would have to sell in order to receive the same amount of cash as if Xtel paid the special dividend? B
13. The simplified balance sheet for MGT Inc. is shown below in market value terms. There are 126,000 shares of stock outstanding. The firm has just announced that it will repurchase $126,560 worth of stock. What will be the market share price of the firm after the repurchase is completed? $20 Cash Fixed Assets Total MGT INC. Market Value Balance Sheet As at December 31, 2015 $630,000 $1,890,000 $2,520,000 Debt Equity Total $0 $2,520,000 $2,520,000
XYZ Co. has 100,000 shares of stock outstanding; total current assets is P2,050,000, P455,000 of which is cash; total current liabilities is P900,000. There is no outstanding dividends payable. Assuming XYZ Co. maintains aminimum current ratio of 2 and that the above accounts will remain unchanged except cash, what is the maximum dividends per share that XYZ Co. can pay in cash? A. P2.50 B. P3.35 C. P3.80 D. P72.05 E. answer not given
(b) i Total dividends Crane, Ltd. has 11,000 outstanding no par value $1.00 preferred shares issued for $110,000 and 35,000 outstanding no par value common shares issued for $21,000. No dividends were paid or declared during 2023 and 2024. Crane wants to distribute $42,960 in dividends on December 31, 2025. (a) Save for Later Your answer is correct. Calculate the amount of dividends to be paid to each group of shareholders (i.e., preferred and common), assuming the preferred shares are non-cumulative and non-participating. Total dividends $ eTextbook and Media Accessibility: Investigate Preferred Calculate the amount of dividends to be paid to each group of shareholders (i.e., preferred and common), assuming the preferred shares are cumulative and non-participating. Preferred 11000 tA $ Common 31960 Common Attempts: 0 of 2 used Submit Answer Foc
Net Income for the year is $ 45 Million.Calculate EPS after stock dividend is paid and what impact would the stock dividend have on Gordong manufactures on Balance Sheet.
The balance sheet for Quinn Corporation is shown here in market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 49,300 Fixed assets 355,000 Equity $ 404,300 Total $ 404,300 Total $ 404,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignore any tax effects. What is the stock selling for today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What will it sell for tomorrow? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Xtel Inc. with a total market value of $630 million has $30 million in excess cash and no debt. Xtel has 1 million shares outstanding. Xtelʹs board is meeng to decide whether to pay out its $30 million in excess cash as a special dividend or to use it to repurchase shares of the firm’s stock. You own 1,000 shares of Xtel stock. Assume that Xtel uses the entire $30 million to pay a special dividend. You are unhappy with Xtelʹs decision and would prefer that Xtel used the excess cash to repurchase shares. What is the number of shares that you would have to buy at ex-dividend price in order to undo the special cash dividend that Xtel paid?

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS