Hewlard Pocket's market value balance sheet is given. Assets Liabilities and Shareholders' Equity A. Original balance sheet 150,000 950,000 $1,100,000 Cash $ Debt $ Equity Value of firm 1,100,000 $1,100,000 Other assets Value of firm Shares outstanding = 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $76,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $1.90 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not round

Hewlard Pocket's market value balance sheet is given. Assets Liabilities and Shareholders' Equity A. Original balance sheet 150,000 950,000 $1,100,000 Cash $ Debt $ Equity Value of firm 1,100,000 $1,100,000 Other assets Value of firm Shares outstanding = 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $76,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $1.90 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not round

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter10: Valuing Early-stage Ventures

Section: Chapter Questions

Problem 2cM

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