The following are the condensed balance sheet of GM and SR on January 01, 2018: GM P 10,250,000 P2,775.000 P3,100,000 P1,250,000 P 3,125,000 SR P 3,057,500 P 800.000 P 1,295,000 Total Assets Liabilities Ordinary Shares Share premium Retained earnings P 100.000 P 862,500 SD acquired the net assets of both GM and SR. Paying cash in the amount of P185,000 and by issuing 198,500 shares to GM. Paying cash in the amount of P 72,000 and by issuing 54,350 shares to SR. The par value of these shares is P35 per share and market value of P40 per share as of January 01, 2018. SD Corp also incurred the following unpaid expenses: SR P 101,250 P 35,000 P 362,500 P 93,750 GM Indirect cost Finder's fee Accounting and legal fees for SEC registration Printing cost of stock certificates P 93,750 P 66,250 P 343,750 P 125.000 SD's retained eamings has a balance of P 10,750,000 on January 01, 2018 immediately before the acquisition.
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
20. what is the net increase or (decrease) in the
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