Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 7QP
Building a
| Long-term debt | $ 55,000,000 |
| 3,100,000 | |
| Common stock ($1 par value) | 12,000,000 |
| 119,000,000 | |
| Capital surplus | 56,000,000 |
During the past year, the company issued 5 million shares of new stock at a total price of $63 million, and issued $30 million in new long-term debt. The company generated $8 million in net income and paid $1.8 million in dividends. Construct the current balance sheet reflecting the changes that occurred at the company during the year.
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The following table presents the long-term liabilities and stockholders’ equity of Information Control Corp. from one year ago: Long-term debt $ 45,000,000 Preferred stock 2,900,000 Common stock ($1 par value) 11,000,000 Accumulated retained earnings 107,000,000 Capital surplus 49,000,000 During the past year, the company issued 4.5 million shares of new stock at a total price of $58 million, and issued $30 million in new long-term debt. The company generated $7.5 million in net income and paid $1.7 million in dividends. Construct the current balance sheet reflecting the changes that occurred at the company during the year
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The following table presents the long-term liabilities and stockholders' equity of
Information Control Corporation from one year ago:
Long-term debt
Preferred stock
Common stock ($1 par value)
Accumulated retained
earnings
Capital surplus
During the past year, the company issued 11.3 million shares of new stock at a total price
of $60.6 million, and issued $36.3 million in new long-term debt. The company
generated $11.6 million in net income and paid $3.3 million in dividends. Construct the
current balance sheet reflecting the changes that occurred at the company during the
year. (Do not round intermediate calculations and enter your answers in dollars, not
millions of dollars, e.g., 1,234,567.)
Information Control Corporation
Balance Sheet
Total long-term debt
$66,300,000
4,130,000
16,300,000
136,300,000
46,300,000
Shareholders' equity
Total equity
Total liabilities & equity
Selected financial data from the September 30 year-end statements of Green
Company are given below:
Interest expense on long-term debt
P95,000.00
Profit
P480,000.00
Total Assets
P5,100,000.00
12% interest bearing long term debt*
P760,000.00
7% Preference shares, P100 par
P900,000.00
Total Stockholders' equity
P3,200,000.00
*This is the only interest bearing liability
Green Company has.
The Company's tax rate is 25%. Total assets at the beginning of the year was
P4,800,000 and total
stockholders' equity was P2,900,000. There has been no change on the preference
shares during the
year. Required:
A. Compute the return on average total
assets.
B. Compute the return on average ordinary
shareholders' equity.
Chapter 2 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 2 - Prob. 1CQCh. 2 - Prob. 2CQCh. 2 - Prob. 3CQCh. 2 - Prob. 4CQCh. 2 - Prob. 5CQCh. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ
Ch. 2 - Building a Balance Sheet Sankey, Inc., has current...Ch. 2 - Building an Income Statement Shellon, Inc., has...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Prob. 4QPCh. 2 - Calculating OCF Barrell, Inc., has sales of...Ch. 2 - Calculating Net Capital Spending Gordon Driving...Ch. 2 - Building a Balance Sheet The following table...Ch. 2 - Cash Flow to Creditors The 2014 balance sheet of...Ch. 2 - Cash. Flow to Stockholders The 2014 balance sheet...Ch. 2 - Prob. 10QPCh. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Calculating total Cash Flows Schwert Corp. shows...Ch. 2 - Using Income Statements Given the .following...Ch. 2 - Prob. 16QPCh. 2 - Marginal versus Average Tax Rates (Refer to Table...Ch. 2 - Prob. 18QPCh. 2 - Accounting Values versus Cash Flows In Problem 18,...Ch. 2 - Calculating Cash Flows Cusic Industries had the...Ch. 2 - Prob. 21QPCh. 2 - Use the following information for Ingersoll, Inc.,...Ch. 2 - Prob. 23QPCh. 2 - Prob. 24QPCh. 2 - Net Fixed Assets and Depreciation On the balance...Ch. 2 - Prob. 26QPCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MC
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