Dual classes of common stock are common in a number of countries. Assume that Yehti Manufacturing has the following capital structure at book value. The A-shares have ten votes per share and the B-shares have one vote per share. Yehti Manufacturing Local Currency (millions) Long-term debt 200 Retained Earnings 300 Paid-in common stock: 1 million A-shares 100 Paid-in common stock: 4 million B-shares 400 Total long-term capital 1000 What proportion of the total long-term capital has been raised by A-shares? What proportion of voting rights is represented by A-shares? What proportion of the dividends should the A-shares receive?
Dual classes of common stock are common in a number of countries. Assume that Yehti Manufacturing has the following capital structure at book value. The A-shares have ten votes per share and the B-shares have one vote per share. Yehti Manufacturing Local Currency (millions) Long-term debt 200 Retained Earnings 300 Paid-in common stock: 1 million A-shares 100 Paid-in common stock: 4 million B-shares 400 Total long-term capital 1000 What proportion of the total long-term capital has been raised by A-shares? What proportion of voting rights is represented by A-shares? What proportion of the dividends should the A-shares receive?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter15: Distributions To Shareholders: Dividends And Repurchases
Section: Chapter Questions
Problem 6MC: Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid...
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Yehti Manufacturing (A). Dual classes of common stock are common in a number of countries. Assume that Yehti Manufacturing has the following capital structure at book value. The A-shares have ten votes per share and the B-shares have one vote per share.
|
Yehti Manufacturing |
Local Currency (millions) |
|
Long-term debt |
200 |
|
|
300 |
|
Paid-in common stock: |
|
|
1 million A-shares |
100 |
|
Paid-in common stock: |
|
|
4 million B-shares |
400 |
|
Total long-term capital |
1000 |
- What proportion of the total long-term capital has been raised by A-shares?
- What proportion of voting rights is represented by A-shares?
- What proportion of the dividends should the A-shares receive?
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