What is the market price of the common stock? What is the book value per share of common stock assuming that dividends are one year in arrears?
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6%
500,000 shares authorized.
Common stock, $10 par value,.......................................................$16,000,000
3,000,000 shares authorized
Additional paid-in capital:
Preferred stock............................................... $400,000
Common stock................................................$25,600,000 $ 26,000,000
Total stockholders’ equity...............................................................$66,500,000
What is the market price of the common stock?
What is the book value per share of common stock assuming that dividends are one year in arrears?
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- Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 a)“6% preferred stock, $100 par value”. Explain the meaning of this sentence in your own words b)How many shares of preferred stock have been issued? c)How many shares of common stock have been issued? d)How much dividends to the preferred stockholderes receive? e)What is the…Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 d)How much dividends to the preferred stockholderes receive? e)What is the market price of the common stock? f)What is the total amount of legal capital?Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 g)What is the total paid-in capital? h)What is the book value per share of common stock? (Assume no dividends in arrears) i) What is the book value per share of common stock assuming that dividends are one year in arrears?
- Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 a)“6% preferred stock, $100 par value”. Explain the meaning of this sentence in your own words b)How many shares of preferred stock have been issued? c)How many shares of common stock have been issued? d)How much dividends to the preferred…A portion of the stockholders’ equity section from the balance cheet of WC appears as below. Stockholders’ equity: Preferred stock, 8% cumulative,$50 par, 40,000 shares authorized , issued and outstanding…………………………………………………………………. $2,000,000 Preferred stock, 12% noncumulative, $100 par, 8,000 shares authorized, Issued, and outstanding…………………………………… 800,000 Common stock, $5 par, 400,000 shares authorized, issued And outstanding……………………………………………… 2,000,000 Total paid -in capital……………………………………………….. $4,800,000 Assume that all stock issued on January 1, and that no dividends were paid during the first two years of operation. During the third year, WC paid total cash dividends of $736,000. Compute the amount of cash dividends paid per share during the third year for each of the three classes of stock. Compute the dividends paid per share during the third year for each of the three classes of stock. What was the…Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 g)What is the total paid-in capital? h)What is the book value per share of common stock?(Assume no dividends in arrears) i)What is the book value per share of common stockassuming that dividends are one year in arrears?
- ANSWER ( D TO I ) 1. Stockholders equity: 6% preferred stock, $100 par value, .............................................$20,000,000 500,000 shares authorized. Common stock, $10 par value,.......................................................$16,000,000 3,000,000 shares authorized Additional paid-in capital: Preferred stock............................................... $400,000 Common stock................................................$25,600,000 $ 26,000,000 Retained earnings.............................................................................$4,500,000 Total stockholders’ equity...............................................................$66,500,000 d)How much dividends to the preferred stockholderes receive? e)What is the market price of the common stock? f)What is the total amount of legal capital? g)What is the total paid-in capital? h)What is the book value per…Assume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . . P5/share Preferred stock. . . . . . . . . . . . . P160/share Transaction costs: Common stock. . . . . . . . . . . . . . P1/share Preferred stock. . . . . . . . . . . . . . P 10/share What is the cost of issuing preferred securities?Assume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . . P5/share Preferred stock. . . . . . . . . . . . . P160/share Transaction costs: Common stock. . . . . . . . . . . . . . P1/share Preferred stock. . . . . . . . . . . . . . P 10/share Required: Compute the following: Net Income after tax DOL DFL DTL WACC
- Assume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . .500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . .400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . .800,000 Variable costs. . . . . . . . . . . . . . . . . . . . ..362,500 Fixed Operating costs. . . . .. . . . . . . . . ..187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . .P5/share Preferred stock. . . . . . . . . . . . .P160/share Transaction costs: Common stock. . . . . . . . . . . . . .P1/share Preferred stock. . . . . . . . . . . . . .P 10/share Compute WACCAssume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Required: Compute the following: Net Income available to Common DOL DFL DTLAssume the capital structure of XYZ Company: Bonds payable, 10% . . . . . . . 500,000 Preferred stock, 8%, P100 par . . . . . . . . 100,000 Common stock, 100,000 shares. . . . . . . 400,000 Other data shows as follows: Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 Variable costs. . . . . . . . . . . . . . . . . . . . . . 362,500 Fixed Operating costs. . . . .. . . . . . . . . . . 187,500 Income tax rate . . . . . . . . . . . . . . . 30% Dividend growth rate . . . . . . . . . . . . . . . . 2% Current market price: Common stock. . . . . . . . . . . . . P5/share Preferred stock. . . . . . . . . . . . . P160/share Transaction costs: Common stock. . . . . . . . . . . . . . P1/share Preferred stock. . . . . . . . . . . . . . P 10/share What is the cost of issuing debt securities?