Question

Arlington Corporation's financial statements (dollars and shares are in millions) are provided here.

Balance Sheets as of December 31
	2016		2015
Assets
Cash and equivalents	$  14,000		$  13,000
Accounts receivable	35,000		30,000
Inventories	34,660		27,000
Total current assets	$ 83,660		$ 70,000
Net plant and equipment	50,000		49,000
Total assets	$133,660		$119,000
Liabilities and Equity
Accounts payable	$ 10,700		$  9,000
Accruals	7,100		5,000
Notes payable	6,200		5,400
Total current liabilities	$ 24,000		$ 19,400
Long-term bonds	20,000		20,000
Total liabilities	$ 44,000		$ 39,400
Common stock (4,000 shares)	40,000		40,000
Retained earnings	49,660		39,600
Common equity	$ 89,660		$ 79,600
Total liabilities and equity	$133,660		$119,000

Income Statement for Year Ending December 31, 2016
Sales	$215,000
Operating costs excluding depreciation and amortization	170,000
EBITDA	$ 45,000
Depreciation & amortization	5,000
EBIT	$ 40,000
Interest	1,750
EBT	$ 38,250
Taxes (40%)	15,300
Net income	$ 22,950
Dividends paid	12,890

Enter your answers in millions. For example, an answer of $25,000,000,000 should be entered as 25,000.

1. Construct Arlington's 2016 statement of stockholders' equity.

   	Common Stock		Retained Earnings	Total Stockholders' Equity
   	Shares	Amount
   Balances, 12/31/15	4000 million	40000 million	38500 million	???
   2016 Net Income			22950 million
   Cash Dividends			12890  million
   Addition to retained earnings				???
   Balances, 12/31/16	4000 million	40000 million	49390  million	???

2. What was Arlington's 2016 EVA? Assume that its after-tax cost of capital is 10%. Round your answer to two decimal places.
   
   $    million
3. 
   
4. What was Arlington's MVA at year-end 2016? Assume that its stock price at December 31, 2016 was $25.
   
   $    million

Answer 1