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

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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. 1. 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? Briefly explain your workings. 2. 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…
The balance sheet for Quinn Corporation is shown here in market value terms. There are 12,000 shares of stock outstanding. Cash Fixed assets Total Will Market Value Balance Sheet $ 49,300 355,000 Equity $ 404,300 Total In lieu of a dividend of $1.45, the company has announced it is going to repurchase $17,400 worth of stock. What effect will this transaction have on the equity of the firm? Note: Do not round intermediate calculations. Input the amount as positive value. New shares outstanding $ 404,300 $ 404,300 shareholders' equity by How many shares will be outstanding after the repurchase? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Share price What will the price per share be after the repurchase? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
H5. Goodnight Films has 50,000 shares of stock outstanding with a par value of $.70 per share and a market price of $12.64 per share. The balance sheet shows $370,000 in the capital in excess of par value account, and $695,000 in the retained earnings account. The company just announced a stock split of 3-for-1. What will be the balance in the capital in excess of par account value after the split? Group of answer choices $123,333 $176,190 $370,000 $411,111 $246,667
The market value balance sheet for Briggs Manufacturing is shown here. The company has declared a 20 percent stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are 28,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 181,000 Debt $ 353,800 Fixed assets 1,080,000 Equity 907,200 Total $ 1,261,000 Total $ 1,261,000 What will the ex-dividend price be?
Company Tyza has a Net income of $15,831,600 and 11,000,000 outstanding shares. It also has 5,000,000 common stock warrants exercisable @ $3.80, stock price for calculations = $5.00 a. What’s the EPS-Basic of the company? b. What’s the EPS-Diluted of the company? c. What’s the shares outstanding for Diluted?
Based on the corporate valuation model, Morgan Inc.'s total corporate value is $200 million. The balance sheet shows $90 million of notes payable, $30 million of long term debt, $40 million of preferred stock, and $100 million of common equity. The company has so million shares of stock outstanding. What is the best estimate of the stock's price per share? 1388 OD 14.12 O c $336 Od 380 O 14.00
Green Thumb Nursery has 11,000 shares of stock outstanding at a market price of $18 per share. The current earnings per share are $1.47. The firm has total assets of $286,000 and total liabilities of $86,000. Next week, the firm will be repurchasing $36,000 worth of stock. Ignoring taxes, what will be the earnings per share after the stock repurchase? a) $1.797 b) $1.832 c) $1.848 d) $1.620 e) $1.883
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. 1. Assume that Xtel uses the entire $30 million in excess cash to pay a special dividend. Calculate Xtelʹs ex-dividend price. Briefly explain your workings. 2. Assume that Xtel uses the entire $30 million to repurchase shares at a current share price. How many shares will Xtel repurchase? Briefly explain your workings.
What is Correct Answer
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 at a current share price. How many shares will Xtel repurchase?
The balance sheet for Tempest, Inc., is shown here in market value terms. There are 29,000 shares of stock outstanding. Market Value Balance Sheet Cash Fixed assets $156,000 560,010 Equity $716,010 Total $ 716,010 Total $716,010 The compay has announced it is going to repurchase $49,300 worth of stock instead of paying a dividend of $1.70. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations 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 intermediate calculations 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
Sipacore Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Sipacore make its decision by completing the following chart (treat each possibility independently): Total assets (1) Before Action After Cash Dividend $1,196,000 1,146,000 (2) After Stock Dividend 1,196,000 $243,000 $ 243,000 $ 243,000 $ Total liabilities Shareholders' equity Common shares 647,000 Retained earnings Total shareholders' equity 647,000 306,000 256,000 953,000 903,000 710,000 306,000 953,000 Total liabilities and shareholders' equity $1,196,000 $ 1,146,000 $ 1,196,000 Number of common shares 100,000 100,000 105,000

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