Essay on Corporate Fiance Assignment Solution

Based on the suggestion that the focus should be on market values, compute the weights of debt, preferred stock, and common stock.

| If there are 2 million shares of stock in the new corporation, what would be the price per share and the book value per share? (Round your answers to 2 decimal places.)

The approx. growth rate g is 0.30 (1+g)31 = 1.40 g ≈ 0.0509 ≈ 5.09%

Shareholder’s equity would be lower than that shown in 1982 ($318,000) because the company has to pay off interest and principal for many loans. There will be little money left for shareholder’s equity.

equity per share at year-end was $40. If year-end total debt was $120 million, and no

We then use the 10K to find their cash, cash equivalents and debt for 2010. According to their annual report they had cash and cash equivalents of $2,673,000,000 and a reported debt of $6,621,000,000.

The accounting equation at the moment assets ($549,000) = liabilities ($221,900) + equity (unknown). To find the equity of the, the equity of a company consists of stocks, money contributed by the owner, and shareholder contributions, just to name a few. Base

With the Value of Equity of RTC, we can deduct RTC’s outstanding debt of $12 million from RTC’s Value to find:

Our 2009 total assets we will have total of $57,459.99 and our total liabilities will equal $24,000, and this will result in a net worth of $33,459.99. Our owner’s equity section of our balance sheet consists of the large

c. Construct Stephenson’s market value balance sheet after the equity issue, but before the purchase has been made. How many shares of common stock does Stephenson have outstanding? What is the price per share of the firm’s stock?

b. MM says total value of firm is still $4 million. $1 million of debt implies total value of equity is

Also, the value of equity = value of enterprise – value of debt = 137,062 ITL.

of outstanding shares) + (short-term debt + long-term debt + capitalized leases + preferred stock - cash on hand)

You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for one year. You expect to receive both $1.25 in dividends and $35 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 12% return. $31.25 $32.37 $38.47 $41.32

Computed: PPE = $6876M / $21,695M = 31.7% Intangible assets = $4041M / $21,695M = 22% Computed: $3,374M / $4,841 = 70% Computed: Accounts payable = $4461M / $13,021M = 34.2% Long-term debt = $2651M / $13,021M = 20.4% Computed: Long-term investments = $8214M / $22,417M = 36.6% Current assets = $7171M / $22,417M = 32%