Question
In: Accounting
Cullumber Company has $1,110,000 in assets and $1,110,000 in stockholders’ equity, with 40,500 shares outstanding the...
Cullumber Company has $1,110,000 in assets and $1,110,000 in stockholders’ equity, with 40,500 shares outstanding the entire year. It has a return on assets of 10%. During 2021, it had net income of $111,000. On January 1, 2022, it issued $440,000 in debt at 6% and immediately repurchased 20,250 shares for $440,000. Management expected that, had it not issued the debt, it would have had net income of $111,000 in 2022. Assume the company pays dividends on common stock equal to its net income each year. Also, assume the accrued interest on the debt was paid at December 31, 2022 and the company has no other debt outstanding at year-end.
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.
Determine the company’s net income and earnings per share for 2021 and 2022. (Ignore taxes in your computations.) (Round earnings per share to 2 decimal places, e.g. $2.66.)
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2021 |
2022 |
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|---|---|---|---|---|
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Net income |
$enter net income in dollars | $enter net income in dollars | ||
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Earnings per share |
$enter earnings per share in dollars rounded to 2 decimal places | $enter earnings per share in dollars rounded to 2 decimal places |
eTextbook and Media
Incorrect answer iconYour answer is incorrect.
Compute the company’s return on common stockholders’ equity for 2021 and 2022. (Round answers to 2 decimal places, e.g. 15.25%)
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2021 |
2022 |
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|---|---|---|---|---|---|---|
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Return on common stockholders’ equity |
enter return on common stockholders’ equity ratio in percentages rounded to 0 decimal places | % | enter return on common stockholders’ equity ratio in percentages rounded to 0 decimal places | % | ||
eTextbook and Media
Partially correct answer iconYour answer is partially correct.
Compute the company’s debt to assets ratio for 2021 and 2022. (Round answers to 2 decimal places, e.g. 15.25%)
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2021 |
2022 |
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|---|---|---|---|---|---|
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Debt to assets ratio |
enter debt to assets ratio in percentages rounded to 0 decimal places |
% |
enter debt to assets ratio in percentages rounded to 0 decimal places |
% | |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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Carla Vista Co. has $1,190,000 in assets and $1,190,000 in
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year. It has a return on assets of 10%. During 2021, it had net
income of $119,000. On January 1, 2022, it issued $380,000 in debt
at 4% and immediately repurchased 17,900 shares for $380,000.
Management expected that, had it not issued the debt, it would have
had net income of $119,000 in 2022. Assume the company pays
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per share. Given this information, what is the company's WACC?
a) 13.53 %
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c) 13.22 %
d) 12.61 %
e)12.30 %
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increases assets.
decreases stockholders' equity.
decreases assets.
Which of the following journal entries would decrease
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In April, the Surf and Sand Hotel books and accepts a cash
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An all-equity company A has 10 shares outstanding. Its equity Beta is 1.25 and its perpetual...
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The stockholders’ equity section of Cullumber Inc. at the beginning of the current year appears below....
The stockholders’ equity section of Cullumber Inc. at the
beginning of the current year appears below.
Common stock, $10 par value, authorized 953,000 shares, 284,000
shares issued and
outstanding
$2,840,000
Paid-in capital in excess of par—common
stock
644,000
Retained
earnings
578,000
During the current year, the following transactions occurred.
1. The company issued to the stockholders 99,000 rights. Ten
rights are needed to buy one share of stock at $32. The rights were
void after 30 days. The market price...
Stockholders' Equity Paid-In Capital: Common Stock—$5 Par Value; 1,300 shares authorized, 310 shares issued and outstanding...
Stockholders' Equity
Paid-In Capital:
Common Stock—$5 Par Value; 1,300 shares
authorized, 310 shares issued and outstanding $1,550
Paid-In Capital in Excess of Par—Common 4,650
Total Paid-In Capital 6,200
Retained Earnings 59,000
Total Stockholders' Equity $65,200
DATA TABLE ABOVE
Western Amusements Corporation had the following?
stockholders' equity on November 30?:
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at $ 14 per share.
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2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
Company A has a market value of equity of $2,000 million and 80 million shares outstanding....
Company A has a market value of equity of $2,000 million and 80
million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
Company A has a market value of equity of $2,000 million and 80 million shares outstanding....
Company A has a market value of equity of $2,000 million and 80
million shares outstanding. Company B has a market value of equity
of $400 million and 25 million shares outstanding. Company A
announces at the beginning of 2019 that is going to acquire Company
B.
The projected pre-tax gains in operating income (in millions of
$) from the merger are:
2019
2020
2021
2022
2023
Pre-tax Gains in Operating Income
12
16
28
38
45
The projected pre-tax...
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