Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Chapter 17, Problem 35P
Summary Introduction
To determine: A Incorporation’s ex-dividend share price.
Introduction:
The date between the announcement date and payment date is ex-dividend date. A stock that trades on ex-dividend date is termed as stock on ex dividend. A stock becomes ex-dividend when the person gets the payment of dividend. When the ex-dividend date starts, the price ultimately falls down.
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Presented below are two independent situations.
(1) Grand Cosmetics acquired 10% of the 200,000 ordinary shares of Cey Fashion at a total
cost of $12 per share on March 18, 2020. On June 30, Cey declared and paid a $60,000
dividend. On December 31, Cey reported net income of $110,000 for the year. At
December 31, the market price of Cey Fashion was $15 per share. The shares are classified
as non-trading.
(2) Unruh, Inc. obtained significant influence over Olsen Corporation by buying 25% of
Olsen's 40,000 outstanding ordinary shares at a total cost of $7 per share on January 1.
2020. On June 15, Olsen declared and paid a cash dividend of $30,000. On December 31.
Olsen reported a net income of SS0.000 for the year.
Instructions
Prepare all the necessary journal entries for 2020 for (a) Grand Cosmetics and (b) Unruh, Inc
On May 1, Republic Corporation purchased 400 shares of stock for P114 per share and held it as FVTPL financial assets. The price decreased to P106 per share on August 1 and then increased to P122 on December 31. During the year, the company received dividends of P3.50 per share. At what amount should the investment be valued in the December 31 balance sheet?
on 1/1/20, ABC Corp bought 500 shares of XYZ Corp for $10,000. XYZ Corp has
25,000 shares outstanding. on 6/1/20, XYZ pays a $100,000 cash dividend to all
shareholders. On 12/31/20, XYZ is trading at $22/share and during 2020 XYZ
reported net income of $250,000. What is the total effect on net income for
ABC from this investment? Assume ABC reports annually on a calendar year
basis.
Chapter 17 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 17.1 - Prob. 1CCCh. 17.1 - Prob. 2CCCh. 17.2 - Prob. 1CCCh. 17.2 - In a perfect capital market, how important is the...Ch. 17.3 - Prob. 1CCCh. 17.3 - Prob. 2CCCh. 17.4 - Prob. 1CCCh. 17.4 - Prob. 2CCCh. 17.5 - Is there an advantage for a firm to retain its...Ch. 17.5 - Prob. 2CC
Ch. 17.6 - Prob. 1CCCh. 17.6 - Prob. 2CCCh. 17.7 - Prob. 1CCCh. 17.7 - Prob. 2CCCh. 17 - Prob. 1PCh. 17 - ABC Corporation announced that it will pay a...Ch. 17 - Prob. 3PCh. 17 - RFC Corp. has announced a 1 dividend. If RFCs...Ch. 17 - Prob. 5PCh. 17 - KMS Corporation has assets with a market value of...Ch. 17 - Natsam Corporation has 250 million of excess cash....Ch. 17 - Suppose the board of Natsam Corporation decided to...Ch. 17 - Prob. 9PCh. 17 - Suppose BE Press paid dividends at the end of each...Ch. 17 - The HNH Corporation will pay a constant dividend...Ch. 17 - Prob. 12PCh. 17 - Prob. 13PCh. 17 - Prob. 14PCh. 17 - Suppose that all capital gains are taxed at a 25%...Ch. 17 - Prob. 16PCh. 17 - Prob. 17PCh. 17 - Prob. 18PCh. 17 - Prob. 19PCh. 17 - A stock that you know is held by long-term...Ch. 17 - Clovix Corporation has 50 million in cash, 10...Ch. 17 - Assume capital markets are perfect. Kay Industries...Ch. 17 - Redo Problem 22., but assume that Kay must pay a...Ch. 17 - Harris Corporation has 250 million in cash, and...Ch. 17 - Redo Problem 22, but assume the following: a....Ch. 17 - Prob. 26PCh. 17 - Use the data in Table 15.3 to calculate the tax...Ch. 17 - Explain under which conditions an increase in the...Ch. 17 - Why is an announcement of a share repurchase...Ch. 17 - AMC Corporation currently has an enterprise value...Ch. 17 - Prob. 31PCh. 17 - Prob. 32PCh. 17 - Explain why most companies choose to pay stock...Ch. 17 - Prob. 34PCh. 17 - Prob. 35P
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