Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Please assist with price per share answer and show work. 

### Hewlard Pocket's Market Value Balance Sheet #### A. Original Balance Sheet | **Assets** | **Liabilities and Shareholders’ Equity** | |------------------|------------------------------------------| | Cash | $150,000 | Debt | $0 | | Other assets | $950,000 | Equity | $1,100,000 | | **Value of firm**| **$1,100,000** | **Value of firm** | **$1,100,000** | **Shares outstanding**: 100,000 **Price per share**: \[ \frac{\$1,100,000}{100,000} = \$11 \] #### Upcoming Transactions Hewlard Pocket needs to hold on to $90,000 of cash for a future investment. It has decided to pay a cash dividend of $2.60 per share and to raise additional cash needed through a new issue of shares. #### Required Calculations: 1. **Price per Share (post dividend and new issue)**: - **Instruction**: Do not round intermediate calculations. Round your answer to 2 decimal places. 2. **Total Value of the Company**: - **Instruction**: Enter your answer in whole dollars, not in millions. 3. **Total Value of Stock Held by New Investors**: - **Instruction**: Enter your answer in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. 4. **Wealth of Existing Investors Including the Dividend Payment**: - **Instruction**: Enter your answer in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. #### Result Table: | **a. Price** | $ ___ per share | |-----------------------------------------------|-----------------| | **b. Total value of the company** | $1,040,000 | | **c. Total value of the stock held by new investors**| $ ___ | | **d. Wealth of existing investors including the dividend payment**| $ ___ | ### Explanation of Financial Concepts 1. **Assets**: Resources owned by the firm, such as cash and other assets. 2. **Liabilities**: The company’s financial obligations. 3. **Shareholders’ Equity**: Equity capital provided by shareholders, representing ownership in the firm.
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Transcribed Image Text:### Hewlard Pocket's Market Value Balance Sheet #### A. Original Balance Sheet | **Assets** | **Liabilities and Shareholders’ Equity** | |------------------|------------------------------------------| | Cash | $150,000 | Debt | $0 | | Other assets | $950,000 | Equity | $1,100,000 | | **Value of firm**| **$1,100,000** | **Value of firm** | **$1,100,000** | **Shares outstanding**: 100,000 **Price per share**: \[ \frac{\$1,100,000}{100,000} = \$11 \] #### Upcoming Transactions Hewlard Pocket needs to hold on to $90,000 of cash for a future investment. It has decided to pay a cash dividend of $2.60 per share and to raise additional cash needed through a new issue of shares. #### Required Calculations: 1. **Price per Share (post dividend and new issue)**: - **Instruction**: Do not round intermediate calculations. Round your answer to 2 decimal places. 2. **Total Value of the Company**: - **Instruction**: Enter your answer in whole dollars, not in millions. 3. **Total Value of Stock Held by New Investors**: - **Instruction**: Enter your answer in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. 4. **Wealth of Existing Investors Including the Dividend Payment**: - **Instruction**: Enter your answer in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. #### Result Table: | **a. Price** | $ ___ per share | |-----------------------------------------------|-----------------| | **b. Total value of the company** | $1,040,000 | | **c. Total value of the stock held by new investors**| $ ___ | | **d. Wealth of existing investors including the dividend payment**| $ ___ | ### Explanation of Financial Concepts 1. **Assets**: Resources owned by the firm, such as cash and other assets. 2. **Liabilities**: The company’s financial obligations. 3. **Shareholders’ Equity**: Equity capital provided by shareholders, representing ownership in the firm.
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