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- Suppose IWT has decided to distribute $50 million, which it presently is holding in liquid short-term investments. IWT’s value of operations is estimated to be about $1,937.5 million; it has $387.5 million in debt and zero preferred stock. As mentioned previously, IWT has 100 million shares of stock outstanding. Assume that IWT has not yet made the distribution. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Now suppose that IWT has just made the $50 million distribution in the form of dividends. What is IWT’s intrinsic value of equity? What is its intrinsic stock price per share? Suppose instead that IWT has just made the $50 million distribution in the form of a stock repurchase. Now what is IWT’s intrinsic value of equity? How many shares did IWT repurchase? How many shares remained outstanding after the repurchase? What is its intrinsic stock price per share after the repurchase?Sheba Ltd.’s statement of financial position shows ordinary share capital of £150,000 and share premium of £50,000 at the beginning of a financial year. If the ordinary share capital is £250,000 and share premium is £120,000 at the end of the financial year, how much did the ordinary share issue raise? Select one: a. £100,000 b. £250,000 c. £370,000 d. £170,000MOL Company has P200,000 available to pay dividends. It has 12,000 10% preference shares (of which, 300 shares are in the treasury), P100 par and 50,000 ordinary shares with a par of P40. The preference share is selling for P125 and the ordinary share is selling at P50 per share. Required: Determine the amount of dividends and dividends per share to be paid to each class of share for each of the following independent assumptions. - Preference share capital is non-participating and non-cumulative. - Preference share capital is non-participating and cumulative. Preference dividends are two years in arrears at the beginning of the year. - Preference share capital is fully participating and cumulative. Preference dividends are one year in arrears at the beginning of the year. - Preference share…
- 9. Ball Company issued 50,000 shares of its P100 par ordinary and 80,000 shares of its P50 convertible preference for a total amount of P12,500,000. At the date of issue, the ordinary shares had a market value of P120 per share and the preference shares are selling at P75 per share. What is the amount credited to share premium from preference shares?Firm F issued 10 million preferred convertible shares of stock at a price of 1 with a 5x liquidation preference, no participation rights, and a 100 million post-money valuation. What is the minimum share price at which investors will convert their preferred shares into common shares? a. 5 b. 50 c. 500 d. 5000SISA Ltd is a company with 40 000 authorised Ordinary Share Capital with a par value of R1. The company issued 30 000 shares at R1.30 for each share. What would be the effect of this transaction in SISA’s records? Select one: a. Ordinary share capital will increase by R39 000 and share premium will be unaffected. b. Ordinary share capital will increase by R39 000 and share premium will increase by R9 000. c. Ordinary share capital will increase by R30 000 and share premium will increase by R39 000. d. Ordinary share capital will increase by R30 000 and share premium will increase by R9 000.
- 2. Akea Corp., reports this journal entry on May 15, 2020: Cash 75,000 Ordinary Share Capital 63,000 Paid in Capital in Excess of Par 12,000 The explanation reads. “Issued ordinary share capital for P50 per share”. What is the par value per share for this transaction?ABC company had 100,000 shares issued and outstanding. Each share has a par value of P10. During the year, it declared a 1 for 5 reverse share split, when the market value of the share is P100. After the spoilt, what is the pae value of the share?ZZZ Company had the following share capital at the end of the current year: Preference share capital, P100 par, 30,000 shares 3,000,000 Ordinary share capital, P50 par, 100,000 shares 5,000,000 Net income for the year 2,600,000 The preference dividend rate is 8% and the preference share is nonconvertible but cumulative and fully participating. After the ordinary share has been paid a dividend of P10 per share, the preference share shall participate in any additional dividend on a prorate basis with the ordinary share. Questions: 1. Compute for the basic earnings per ordinary share. 2. Compute for the basic earnings per preference share.
- A corporation’s ordinary shares currently pays an annual dividend of P5.40 per share. The required return on the ordinary share is 12%. The value of the share when dividends are expected to grow at an annual rate of 0% to infinity isa.120b.45c.30d.25A companys share capital consists of 3 million ordinary shares of RO 1 each, issued at a premium of 10%. What is the amount OMR of Share premium to be shown under the Equity section of the Statement of financial position? a. 150,000 b. 3,300,000 c. 3,000,000 d. 300,000Answer with computation and explanation If the total authorized share capital is P1,000,000 at P10 par, the unissued share capital is 25,000 shares, and all the issued shares were sold at P15, then the total shareholders' equity before any operation activities is a 2 750,000. b P1,125,000 c. P375,000. d. P250,000.
