Question
In: Finance
The balance sheet for Tempest, Inc., is shown here in market value terms. There are 26,000...
|
The balance sheet for Tempest, Inc., is shown here in market value terms. There are 26,000 shares of stock outstanding. |
| Market Value Balance Sheet | |||||||
| Cash | $ | 156,000 | |||||
| Fixed assets | 514,800 | Equity | $ | 670,800 | |||
| Total | $ | 670,800 | Total | $ | 670,800 | ||
| The compay has announced it is going to repurchase $26,000 worth of stock instead of paying a dividend of $1.00. | |
| 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.) |
Solutions
jeff jeffy answered 6 months agoRelated Solutions
The balance sheet for Tempest, Inc., is shown here in market value terms. There are 26,000...
The balance sheet for Tempest, Inc., is shown here in market
value terms. There are 26,000 shares of stock outstanding.
Market Value Balance Sheet
Cash
$
111,000
Fixed assets
484,920
Equity
$
595,920
Total
$
595,920
Total
$
595,920
The compay has announced it is going to repurchase
$33,800 worth of stock instead of paying a dividend of $1.30.
a.
What effect will this transaction have on the equity of the
firm? (Input the answer as positive value. Do...
The balance sheet for Pie Crust, Inc., is shown here in market value terms. There are...
The balance sheet for Pie Crust, Inc., is shown here in market
value terms. There are 15,000 shares of stock outstanding.
Market Value Balance Sheet
Cash
$140,000
Fixed assets
470,000
Equity
$610,000
Total
$610,000
Total
$610,000
In lieu of a dividend of $1.20, the company has announced it is
going to repurchase $18,000 worth of stock instead of paying a
dividend.
Requirement 1:
What effect will this transaction have on the
equity of the firm? (Do not round
intermediate calculations....
The balance sheet for the Chrome Corp. is shown here in market value terms. There are...
The balance sheet for the Chrome Corp. is shown here in market
value terms. There are 9,300 shares of stock outstanding.
The balance sheet for the Chrome Corp. is shown here in market
value terms. There are 9,300 shares of stock outstanding.
Market Value Balance Sheet
Cash
$29,500
Equity
$133,920
Fixed Assets
$104,420
Total
$133,920
Total
$133,920
The company has declared a dividend of $0.72 per share. The
stock goes ex-dividend tomorrow. Ignoring any tax effects, what is
the stock...
The balance sheet for Fourth Corp. is shown here in market value terms. There are 5,000...
The balance sheet for Fourth Corp. is shown here in market value
terms. There are 5,000 shares of stock outstanding. Market Value
Balance Sheet Cash $ 44,300 Equity $ 414,300 Fixed assets 370,000
Total $ 414,300 Total $ 414,300 The company has declared a dividend
of $2.00 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.)...
The balance sheet for Sinking Ship Corp. is shown here in market value terms. There are...
The balance sheet for Sinking Ship Corp. is shown here in market
value terms. There are 6,000 shares of stock outstanding.
Market Value Balance Sheet
Cash
$
44,900
Equity
$
474,900
Fixed assets
430,000
Total
$
474,900
Total
$
474,900
The company has declared a dividend of $1.80 per share. The
stock goes ex dividend tomorrow.
Ignoring any tax effects, what is the stock selling for
today?
Ignoring any tax effects, what will it sell for tomorrow?
Ignoring...
The market value balance sheet for Bobaflex Manufacturing is shown here. The company has declared a...
The market value balance sheet for Bobaflex Manufacturing is
shown here. The company has declared a 25 percent stock dividend.
The stock goes ex dividend tomorrow (the chronology for a stock
dividend is similar to that for a cash dividend).
Market Value Balance Sheet
Cash
$
99,000
Debt
$
158,000
Fixed assets
830,000
Equity
771,000
Total
$
929,000
Total
$
929,000
a.
There are 34,000 shares of stock outstanding. What is the
current share price? (Do not round...
Here are book- and market-value balance sheets of the United Frypan Company: Book-Value Balance Sheet Net...
Here are book- and market-value balance sheets of the United
Frypan Company:
Book-Value Balance Sheet
Net working capital
$
35
Debt
$
40
Long-term assets
65
Equity
60
$
100
$
100
Market-Value Balance Sheet
Net working capital
$
35
Debt
$
40
Long-term assets
190
Equity
185
$
225
$
225
Assume that MM’s theory holds except for taxes. There is no
growth, and the $40 of debt is expected to be permanent. Assume a
37% corporate tax rate....
Here are book and market-value balance sheets of the United Frypan Company: Book-Value Balance Sheet Net...
Here are book and market-value balance sheets of the United
Frypan Company:
Book-Value Balance Sheet
Net working capital
$
70
Debt
$
60
Long-term assets
30
Equity
40
$
100
$
100
Market-Value Balance Sheet
Net working capital
$
70
Debt
$
60
Long-term assets
150
Equity
160
$
220
$
220
Assume that MM’s theory holds except for taxes. There is no
growth, and the $60 of debt is expected to be permanent. Assume a
36% corporate tax rate....
The most recent financial statements for ABC, Inc. are shown here: Income Statement Balance Sheet...
The most recent financial statements for ABC, Inc. are shown
here:
Income Statement
Balance Sheet
Sales
4,800
Current assets
6,084
Current Liabilities
1,244
Costs
3,840
Fixed assets
5,183
Long-term debt
2,487
Taxable income
960
Equity
7,036
Taxes (35%)
336
Retained earnings
500
Net income
624
Total
11,267
Total
11,267
The company is running at full capacity and the company
maintains a constant 50 percent dividend payout ratio. Like every
other firm in its industry, next year's sales are projected...
The most recent financial statements for Bello, Inc., are shown here: Income Statement Balance Sheet...
The most recent financial statements for Bello, Inc., are shown
here:
Income Statement
Balance Sheet
Sales
$
40,200
Assets
$
148,000
Debt
$
43,500
Costs
27,300
Equity
104,500
Taxable income
$
12,900
Total
$
148,000
Total
$
148,000
Taxes (23%)
2,967
Net income
$
9,933
Assets and costs are proportional to sales; debt and equity are
not. A dividend of $3,450 was paid, and the company wishes to
maintain a constant payout ratio. Next year’s sales are projected...
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