The company with the common equity accounts shown here has declared a 4-for-1 stocksplit. The firm's 75-cent per-share cash dividend on the new (postsplit) shares representsan increase of 10 percent over last year's dividend on the presplit stock.Common stock ($1 par value)Capital surplusRetained earningsTotal owners' equity$ 225,000535,0002,968,500$ 3,728,500a. What is the new par value per share? (Do not round intermediate calculations andround your answer to 2 decimal places, e.g., 32.16.)b. What was last year's dividend per share? (Do not round intermediate calculationsand round your answer to 2 decimal places, e.g., 32.16.)a. New par valueb. Dividend per share

STEP 1 The total of a company's declared dividends issued for each outstanding share of its common…

Answered: The company with the common equity…

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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Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost $8 million today. Karns estimates that, once drilled, the oil will generate positive net cash flows of $4 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have more information about the local geology and about the price of oil. Karns estimates that if it waits 2 years then the project would cost $9 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $4.2 million a year for 4 years and a 10% chance that they would be $2.2 million a year for 4 years. Assume all cash flows are discounted at 10%. a. If the company chooses to drill today, what is the project's net present value? Do not round intermediate calculations. Enter your answer in millions. For…
Assume that a company has the following information: Common Stock Information: # of shares issued and outstanding Par value per share 20,000 $9 Stockholders' Equity section of the Balance Sheet: Common Stock $180,000 Additional Paid in Capital Retained Earnings Total Stockholders' Equity $3,000,000 $4,820,000 $8,000,000 The company has the option of EITHER announcing a 3:1 stock split OR declaring a 200% stock dividend. Fill in the blanks below to show the stockholders' equity balances under each of these options. After After Current 3:1 200% Situation Stock Split Stock Dividend Common Stock Information: # of shares issued and outstanding 20,000 Par value per share $9 Stockholders' Equity section of the Balance Sheet: Common Stock $180,000 Additional Paid in Capital $3,000,000 Retained Earnings $4,820,000 Total Stockholders' Equity $8,000,000 II IIII
The owners’ equity accounts for Vulcano International are shown here: Common stock ($.50 par value) $ 20,000 Capital surplus 210,000 Retained earnings 587,300 Total owners’ equity $ 817,300 a-1. If the company declares a 4-for-1 stock split, how many shares are outstanding now? (Do not round intermediate calculations.) a-2. What is the new par value per share? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b-1. If the company declares a 1-for-5 reverse stock split, how many shares are outstanding now? (Do not round intermediate calculations.) b-2. What is the new par value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
The owners' equity accounts for Mars International are shown here: Common stock ($.50 par value) Capital surplus Retained earnings Total owner's equity Please show the equity accounts will change if: a. The company declares a 5-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for-4 reverse stock split. $20,000 210,000 587,300 $817,300 c. The balance sheet for Mars International is shown below in Market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Equity $817,300 Cash $ 99,660 Fixed assets 717,640 Total $817,300 Total $817,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid? d. suppose the company has announced it is going to repurchase $17,400 worth of stock. What effect…
The Phibbs Company paid total cash dividends of $200,000 on 25,000 outstanding common shares. On the most recent trading day, the common shares sold at $80. What is this company's dividend yield? Multiple Choice 25% 6.4% 16.9% 10% X
The balance sheet for Chevelle Corp. is shown here in market value terms. There are 9,000 shares of stock outstanding. Market Value Balance Sheet Cash $43,700 Fixed assets 310,000 Total $353,700 Equity $353,700 Total $353,700 Instead of a dividend of $1.40 per share, the company has announced a share repurchase of $12,600 worth of stock. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places. What will the price per share be after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places.
Just prior to the end of the fiscal year, Biofuel Corporation reported the following information: Common stock ($0.20 par value) Additional paid-in capital $ 70,000 2,000,000 900,000 Retained earnings Treasury stock Cash flows from financing activities Required: Complete the table below for each of the three following independent cases: Note: Round "Par per share" answers to 2 decimal places. Case 1: The board of directors declared a cash dividend of $0.02 per share. Case 2: The board of directors declared and issued a 100 percent stock dividend when the stock was selling at $12 per share. Case 3: The board of directors announced 2-for-1 stock split. The market price prior to the split was $20 per share. Items After Stock Dividend Common stock account Par value per share Shares outstanding Additional paid-in capital Retained earnings Total stockholders' equity Cash flows from financing activities Before Any Dividends $ $ $ $ $ 0 24,000 70,000 $ 0.2 2,000,000 900,000 24,000 After Cash…
On January 1, 2010, the accounts of Mac Corporation showed the following: Common stock, par SI, authorized 100.000 shares Capital in excess of par value ($2 per share) Retained carnings 60,000 140,000 During 2010, the following transactions occurred affecting stockholders' equity (in the order given) A B. C. D. Issued a 100° stock dividend when the market price was at $5 per share. Purchased treasury stock, 1.000 shares at a total cost of $8.000. Declared and paid cash dividends. SI5.000. Net income for 2010. S25.000
Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (3,500,000 shares at $10 par) $ 35,000,000 Capital in excess of par* 10,000,000 Retained earnings 45,000,000 Net worth $ 90,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price – Par value). The company’s stock is selling for $28 per share. The company had total earnings of $7,000,000 with 3,500,000 shares outstanding and earnings per share were $2.00. The firm has a P/E ratio of 14. e. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $1.15 in spite of the fact that the stockholders now have 15 percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $28. What is an investor’s total investment worth after the stock dividend if he/she…
The following is the abstract of the shareholders' equity of Shake Corporation before declaration of cash dividends 12% Preference Share Capital, par P80, 30,000 shares all issued and outstanding P3,000,000 Ordinary Share Capital, par P40, 20,000 shares all issued and outstanding P1,000,000 Retained Earnings 5,500,000 The Board declared dividends of P1,200,000. No dividends were distributed last year. Required: Determine how much dividends the preference and ordinary shares will receive given the following independent situations: d. The Preference share is cumulative and fully participating

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