equity section of Omar Company consists of common stock $600‚000 and retained earnings $900‚000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60‚000‚ $10 par value shares outstanding‚ or (2) effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share. Instructions Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity and outstanding shares
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speak. Since these renovations are so frequent here it is hard to believe that they would have time to make sure the building was up-to-date ADA modifications‚ right? Wrong. The building is actually one of the many on campus that has been on par‚ if not over par with following ADA guidelines. The entrances are the first of many adjustments that they have been up to speed with. There are five entrances to the building; three in the front for students and guests and two in the back; one for employees
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BMGT440 Section 0301 Readers Digest Case Founded in 1922‚ by DeWitt and Lila Wallace‚ Readers Digest described itself as “A reader-driven‚ family magazine” that used both freelance and staff writers to choose segments of or summarize articles and books. Going public in 1990‚ Readers Digest had a worldwide circulation of 23 million and by the time of this case was being published in 48 editions and 19 languages. The magazine had over 100 million readers a month. Reiman Holding Corporation
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Chapter 10 Problems 2. LL Incorporated’s currently outstanding 11% coupon bonds have a yield to maturity of 8%. LL believes it could issue at par new bonds that would provide a similar yield to maturity. If its marginal tax rate is 35%‚ what is LL’s after-tax cost of debt? rd(1 - T) = 0.08(0.65) = 5.2%. 4. Burnwood Tech plans to issue some $60 par preferred stock with a 6% dividend.The stock is selling on the market for $70.00‚ and Burnwood must pay flotation costs of 5% of the market price
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Bond Practice Problems II 1. Seven years ago your firm issued $1‚000 par value bonds paying a 7% semi-annual coupon with 15 years to maturity. The bonds were originally issued at par value. a. What was the original yield to maturity on the bonds? They were issued at par…so the YTM = Coupon rate: 7% b. If the current price of the bonds is $875‚ what is the yield to maturity of the bonds TODAY? 1000 FV .07(1000)÷2= PMT (15-7)*2 = N -875 PV I/Y = 4.623*2 = 9.25% c. If the yield
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premium. Today‚ Corzine called the bonds. The bonds originally were sold at their face value of $1‚000. Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price. PV = 1000; N = 6; PMT = 140; FV = 1090; CPT I/Y I/Y = 15.02% 2. You just purchased a bond which matures in 5 years. The bond has a face value of $1‚000‚ and has an 8 percent annual coupon. The bond has a current yield of 8.21
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issued and is being held by stockholders. Legal capital= # of issued shares x par value per share (3) Par Value Stock: Capital stock that has been assigned an arbitrary value per share in the corporate charter. (4) No-par value Stock: Capital stock that has not been assigned a value in the corporate charter. (5) Stated Value of No-par value Stock: Value per share assigned by the board of directors to no-par value stock. Authorized Issued Outstanding (6) Paid-in Capital: Amount
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Question 1 1 out of 1 points The 8 percent annual coupon bonds of the ABC Co. are selling for $880.76. The bonds mature in 10 years. The bonds have a par value of $1‚000 and payments are made semi-annually? What is the before-tax cost of debt? Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. Selected Answer: 9.91 Correct Answer: 9.91 Answer range +/- 0.05 (9.86 - 9.96) Response Feedback: NPER = 10* 2 RATE = ? * 2 = Answer = 4
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issue 100‚000 shares of $100 par value‚ 6% cumulative and nonparticipating preferred stock‚ and 1‚000‚000 shares of $1 par value common stock. It then Apr. 28 Jul. 16 Aug 6 Sep. 17 Dec. 31 Dec. 31 Issued 100‚000 shares of common stock at $23 per share. Issued 6‚000 shares of preferred stock to Thevenot Corporation for the following assets: equipment with a fair value of $76‚000; a warehouse with a fair value of $240‚000; and land with an appraised value of $320‚000. Purchased 750 shares
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stock with a par value of $1 per share. b. Royal Corporation has no-par common with a stated value of $5 per share. c. French Corporation has no-par common; no stated value has been assigned Chapter 2 Exercise 3 3. Analysis of stockholders’ equity Star Corporation issued both common and preferred stock during 20X6. The stockholders’ equity sections of the company’s balance sheets at the end of 20X6 and 20X5 follow. | 20X6 | 20X5 | Preferred stock‚ $100 par value‚ 10% | $580
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