B Corp. has net income of $3,000,000 and 2 million shares outstanding. The company’s stock trades...

B Corp. has net income of $3,000,000 and 2 million shares outstanding. The company’s stock trades at $32 per share. B Corp plans to repurchase $20,000,000 worth of stock. What is the EPS immediately following the repurchase? What is the P/E ratio?

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Sports Corp has 11.8 million shares of common stock outstanding, 6.8 million shares of preferred stock...

Sports Corp has 11.8 million shares of common stock outstanding, 6.8 million shares of preferred stock outstanding, and 2.8 million bonds. If the common shares are selling for $26.8 per share, the preferred share are selling for $14.3 per share, and the bonds are selling for 96.82 percent of par, what would be the weight used for equity in the computation of Sports's WACC?

Carington Corp. has outstanding 10 million shares of $2 par value common stock and 1 million...

Carington Corp. has outstanding 10 million shares of $2 par value common stock and 1 million shares of 7% $4 par value preferred stock. The company declares total dividends amounting to $50,000, $250,000, and $600,000 during 2017,2018, and 2019, respectively. Calculate the amount of dividends to be distributed to preferred and common shareholders under each of the two following scenarios: A) The preferred stock is noncumulative B) The preferred sock is cumulative

Net income $500 million, common stock $1 par. 1/1 shares outstanding 150 million shares, 2/1 retire...

Net income $500 million, common stock $1 par. 1/1 shares outstanding 150 million shares, 2/1 retire for cash 24 million shares, 7/23 2-for-1 split. 9/1 sold for cash 18million shares Preferred stock, 10% $60 par, cumulative, non-convertible $70 million. Preferred stock, 8% $50 par, cumulative, convertible into 4 million shares common stock $100 million. Incentive stock option outstanding, fully vested for 4 million shares of common stock, exercisable at $15 per share. Bond payable, 12.5% convertible into 20 million shares...

Tabb Corp has 9,293 shares of common stock outstanding at the beginning of the year. Net...

Tabb Corp has 9,293 shares of common stock outstanding at the beginning of the year. Net income was $359,293. No dividends were paid this year nor last year. On March 1st, the company purchased 2,000 shares of its common stock and held it in treasury. There was a 2 for 1 stock split that occurred on common stock on Dec. 1. The tax rate is 30%. A $1,500,000, 5% nonconvertible bond was issued June 30 of the current year at...

ABC Corporation has 1/2 million shares of common stock outstanding, 1 million shares of preferred stock,...

ABC Corporation has 1/2 million shares of common stock outstanding, 1 million shares of preferred stock, and 20,000 4.5% semiannual bonds outstanding. The common stock has a beta of 1.2. The corporate bond has a par value of $1,000 each and matures in 21 years. Currently the bonds are selling at 104% of their face values. The market risk premium is 10%. The risk-free rate is 2.5%. The common stock sells for $75 per share. The preferred stock sells for...

Anderson Corporation has 1 million shares of common stock outstanding, 1/2 million shares of preferred stock,...

Anderson Corporation has 1 million shares of common stock outstanding, 1/2 million shares of preferred stock, and 20,000 3.5% semiannual bonds outstanding. The common stock has a beta of 1.2. The corporate bond has a par value of $1,000 each and matures in 14 years. Currently the bonds are selling at 94% of their face values. The market risk premium is 9%. The risk-free rate is 3%. The common stock sells for $40 per share. The preferred stock sells for...

Midland Corporation has a net income of $15 million and 6 million shares outstanding. Its common...

Midland Corporation has a net income of $15 million and 6 million shares outstanding. Its common stock is currently selling for $40 per share. Midland plans to sell common stock to set up a major new production facility with a net cost of $21,660,000. The production facility will not produce a profit for one year, and then it is expected to earn a 15 percent return on the investment. Wood and Gundy, an investment dealer, plans to sell the issue...

A firm has 2,000,000 shares of stock outstanding, total debt of $3,000,000 at an annual interest...

A firm has 2,000,000 shares of stock outstanding, total debt of $3,000,000 at an annual interest rate of 8% and annual depreciation expense of $300,000, and is considering borrowing an additional $6,000,000 at 8% and buying back one-half of those shares. Assuming EBIT of $1.2 million, what is this company’s cash coverage ratio (a) before and (b) after the proposed restructuring? What can you conclude about the impact of financial leverage on a firm’s cash coverage ratio?

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding,...

Spicer Reports Corp has 400,000 shares of common stock outstanding, 200,000 shares of preferred stock outstanding, and 40,000 bonds. If the common shares are selling for $25 per share, the preferred shares are selling for $12.50 per share, and the bonds are selling for 97 percent of par, what would be the weight used for common stock equity in the computation of Spicer's WACC? A. 18.59% B. 19.49% C. 24.37% D. 62.50% E. 79.75% Comfort Chair, Inc. has a $1.5...

A company’s stock price is $50 and 10 million shares are outstanding. The company is considering...

A company’s stock price is $50 and 10 million shares are outstanding. The company is considering giving its employees three million at-the-money five-year call options. Option exercises will be handled by issuing more shares. The stock price volatility is 25%, the five-year risk-free rate is 5% and the company does not pay dividends. Estimate the cost to the company of the employee stock option issue.

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