Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- The balance sheet for Quinn Corporation is shown here in market value terms. There are 9,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 44,600 Equity $ 444,600 Fixed assets 400,000 Total $ 444,600 Total $ 444,600 The company has declared a dividend of $1.50 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Ignoring any tax effects, what will it sell for tomorrow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardA company’s preferred stock pays an annual dividend of 4.5 percent and is currently selling for $60, and there are 100,000 shares outstanding. 1. determine the company preferred stocks and the cost of preferred stocks.arrow_forwardThe stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there are 20,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below. Liabilities and Equity $1, 000, 000 Assets Cash Fixed assets $150, 000 Equity 850, 000 So far, price of the share today is $50 per share and it will sell at $49 per share for tomorrow. Now suppose that Payout announces its intention to repurchase $20,000 worth of stock instead of paying out the dividend. a. What effect will the repurchase have on an investor who currently holds 200 shares and sells 4 of those shares back to the company in the repurchase? Total value of the position b. What effect will the initial cash dividend payment have on the same investor? Total value of the positionarrow_forward
- The balance sheet for Tempest, Inc., is shown here in market value terms. There are 29,000 shares of stock outstanding. Market Value Balance Sheet Cash Fixed assets $156,000 560,010 Equity $716,010 Total $ 716,010 Total $716,010 The compay has announced it is going to repurchase $49,300 worth of stock instead of paying a dividend of $1.70. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What will the price per share be after the repurchase? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. The transaction will b. New shares outstanding c. Share price shareholders' equity byarrow_forwardA stock has 94 million shares outstanding, with a current share price of $3.53 per share. If the firm's book value of equity is $120 million, what is its market-to-book ratio?arrow_forwardThe Castle Company recently reported net profits after taxes of $14.7 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $121 per share. Compute the stock's earnings per share (EPS). Round the answer to two decimal places.$_______________per share What's the stock's P/E ratio? Round the answer to two decimal places.$______________ times Determine what the stock's dividend yield would be if it paid $6.9 per share to common stockholders. Round the answer to two decimal places._______________ %arrow_forward
- The balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share\times total shares outstanding) of $1,358,000. Furthermore, the firm's income statement for the year just ended has a net income of $577, 000, which is $ 0.321 per share of common stock outstanding. The price - earnings ratio for firms similar to Underwood Motors is 21.33. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares?arrow_forwardHi, If a company has 32,000 common stock shares outstanding $10 par value, then purchases 2,300 shares of treasury stock at $25 per share. How would this be jouralized? Also, after those transaction the same company declared a $0.10 per share cash dividend on the common stock outstanding. How would this be jouralized?arrow_forwardMen's Place has 21,000 shares of stock outstanding with a par value of $1 per share and a market value of $27.18 per share. The balance sheet shows $21,000 in the common stock account, $187,600 in the capital in excess of par value account, and $218,200 in the retained earnings account. The firm just announced a large stock dividend of 35 percent. What is the market value per share after the dividend?arrow_forward
- The market capitalization of Morning Rose Corp. is $5,580,000 at the company's most recent trade of $9.00 per share. How many shares of stock are outstanding?arrow_forwardThe balance sheet for Quinn Corporation is shown here in market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 49,300 Fixed assets 355,000 Equity $ 404,300 Total $ 404,300 Total $ 404,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignore any tax effects. What is the stock selling for today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. What will it sell for tomorrow? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.arrow_forwardThe balance sheet for Larry Underwood Motors shows a book value of stockholders' equity (book value per share×total shares outstanding) of $1,300,000. Furthermore, the firm's income statement for the year just ended has a net income of $536,000, which is $0.264 per share of common stock outstanding. The price-earnings ratio for firms similar to Underwood Motors is 20.89. a. What price would you expect Underwood Motors shares to sell for? b. What is the book value per share for Underwood's shares?arrow_forward
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