Problem 2-18 Functions of Financial Markets (L03) Consider the table shown below to answer the question posed in part a. Parts b and c are independent of the given table. Callaway Golf (ELY) Alaska Air Group (ALK) Yum! Brands (YUM) Caterpillar Tractor (CAT) Microsoft (MSFT) Number of Share (millions) 94.2 . 123.7 301.7 * 543.3 7,560 Stock Price 27.30 50.70 103.07 186.66 242.12 Market Capitalization (5 millions) $2,572 $ 6,272 $ 31,096 $ 101,412 $1,830,427 a. The price of Yum! Brands stock has risen to $160. What is the market value of the firm's equity if the number of outstanding shares does not change? Note: Enter your answer in dollars not in billions of dollars. b. The rating agency has revised Catalytic Concepts' bond rating to AAA (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? Note: Enter your answer as a percent rounded to 1 decimal place. c. A farmer and a meatpacker use the commodity markets to reduce their risk. One agrees to buy live cattle in the future at a fixed price, and the other agrees to sell. Which one sells?

b Preview File Edit View Go Tools Window Help ♥ mgt120h-a17.pdf Page 2 of 10 Market value of common shares Number of common shares outstanding Par value of common shares Retained earnings a. $2,250,000 b. $2,600,000 c. $2,500,000 d. $2,400,000 e. $2,750,000 Cost-Volume-Profit Analysis 3. Common, Inc. has just issued a 10% stock dividend. The following information was available just prior to issuing the dividend. 40 The Effect Of Prepaid Taxes On Assets And Liabili... O Debenture Valuation D What is the proper balance in Retained Earnings immediately after issuing the stock dividend? CC 7 V ↑ Search (Cª Sat Apr 15 3:04 PM $25 each 100,000 $10 per share $2,500,000 Allstate Inc, has 10.000 shares of $8, no par value, cumulative preferred shares and 100,000 shares of no par value common shares outstanding at December 31, 2016. If the board of directors declares a $60,000 dividend, the Preferred shareholders will receive 1/10 of what b. Preferred shareholders will rece of what the common…

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