Horton Industries shareholders equity included 260 million shares of $1 par common stock and a balance in paid-in capital-excess of par 2,600 million. Assuming that Horton retires it reacquires(restores their status to that of authorized but unissued shares), by what amount will Horton's total paid-in capital decline if it reacquires 5 million shares at 9.00 per share? total paid-in capital will decline by?

Horton Industries shareholders equity included 260 million shares of $1 par common stock and a balance in paid-in capital-excess of par 2,600 million. Assuming that Horton retires it reacquires(restores their status to that of authorized but unissued shares), by what amount will Horton's total paid-in capital decline if it reacquires 5 million shares at 9.00 per share? total paid-in capital will decline by?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

See similar textbooks

Similar questions

Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid short-term investments. IWT’s value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding. Assume that IWT has not yet made the distribution. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT’s intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?
On December 31, 2020, the Treasury Share account of Jumbo Corporation showed a balance of $490,000. These shares were previously reacquired from ordinary shareholders. On December 31, 2020, Ordinary Share Capital showed a balance of $22,050,000 at $75 par value. On the same date, there were 238,000 outstanding ordinary shares. All subscriptions were fully paid and share certificates were issued. How much was the cost per share of treasury shares upon reacquisition? Round off you answer to two decimal places.
The common stock and debt of Northern Sludge are valued at $65 million and $35 million, respectively. Investors currently require a 15.9% return on the common stock and a/an 7.8% return on the debt. If Northern Sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Northern’s debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to two decimal places.)
Agee Storage issued 28 million shares of its $1 par common stock at $13 per share several years ago. Last year, for the first time, Agee reacquired 1 million shares at $11 per share. If Agee now retires 1 million shares at $16 per share. By what amount will Agee's total paid-in capital decline? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) Total paid-in capital will decline by million
Agee Storage issued 35 million shares of its $1 par common stock at $16 per share several years ago. Last year, for the first time, Agee reacquired 1 million shares at $14 per share. If Agee now retires 1 million shares at $19 per share. By what amount will Agee’s total paid-in capital decline?
The common stock and debt of Northern Sludge are valued at $62 million and $38 million, respectively. Investors currently require a 16.8% return on the common stock and a/an 7.2% return on the debt. If Northern Sludge issues an additional $21 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Northern’s debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to two decimal places.) What is the new return on equity? ____%
BK Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of P200, and 100 shares of stock. If BK converts its short-term investments to cash and repurchases P100 of its stock, what is the resulting estimated intrinsic stock price and how many shares remain outstanding?
The common stock and debt of Northern Sludge are valued at $70 million and $30 million, respectively. Investors currently require a 16.0% return on the common stock and a/an 7.7% return on the debt. If Northern Sludge issues an additional $13 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Northern’s debt and that there are no taxes. a. What is the new return on equity?
The common stock and debt of Northern Sludge are valued at $80 million and $20 million, respectively. Investors currently require a 16.2% return on the common stock and a/an 7.5% return on the debt. If Northern Sludge issues an additional $11 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect the interest rate on Northern’s debt and that there are no taxes. (Do not round intermediate calculations. Enter your answer as a percent rounded to two decimal places.) The common stock and debt of Northern Sludge are valued at $80 million and $20 million, respectively. Investors currently require a 16.2% return on the common stock and a/an 7.5% return on the debt. If Northern Sludge issues an additional $11 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? Assume that the change in capital structure does not affect…
S American Health Systems currently has 7,200,000 shares of stock outstanding and will report earnings of $12 million in the current year. The company is considering the issuance of 1,300,000 additional shares that will net $40 per share to the corporation. a. What is the immediate dilution potential for this new stock issue? (Do not round intermediate calculations and round your answer to 2 decimal places.) Dilution b-1. Assume that American Health Systems can earn 15 percent on the proceeds of the stock issue in time to include them in the current year's results. Calculate earnings per share. (Do not round intermediate calculations and round your answer to 2 decimal places.) Earnings per share per share b-2. Should the new issue be undertaken based on earnings per O Yes O No share?
In previous years, Cox Transport reacquired 2 million treasury shares at $20 per share and, later, 1 million treasury shares at $26 per share. By what amount will Cox’s paid-in capital—share repurchase increase if it now sells 1 million treasury shares at $29 per share and determines cost as the weighted-average cost of treasury shares?
Simmons Mineral Operations, Inc., (SMO) currently has 430,000 shares of stock outstanding that sell for $50 per share. Assuming no market imperfections or tax effects exist, what will the share price be after: a. SMO has a four-for-three stock split? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) New share price $ b. SMO has a 10 percent stock dividend? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) New share price $ c. SMO has a 43.5 percent stock dividend? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) New share price $ d. SMO has a three-for-seven reverse stock split? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) New share price $ e. Determine the new number of shares outstanding in parts…