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Hewlard Pocket's market value balance sheet is given. Liabilities and Shareholders' Equity Assets A. Original balance sheet $ 150, e0е Debt 950, eөө Еquity $1,100,000 Value of firm Cash Other assets 1,100,000 $1,100,000 Value of firm Shares outstanding - 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $90,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.60 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not ro intermediate calculations. Round your answer to the nearest whole dollar amount.)

Hewlard Pocket's market value balance sheet is given. Liabilities and Shareholders' Equity Assets A. Original balance sheet $ 150, e0е Debt 950, eөө Еquity $1,100,000 Value of firm Cash Other assets 1,100,000 $1,100,000 Value of firm Shares outstanding - 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $90,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.60 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not ro intermediate calculations. Round your answer to the nearest whole dollar amount.)

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...
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Hewlard Pocket's market value balance sheet is given. Liabilities and Shareholders' Equity Assets A. Original balance sheet $ 150, e0е Debt 950, eөө Еquity $1,100,000 Value of firm Cash Other assets 1,100,000 $1,100,000 Value of firm Shares outstanding - 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $90,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.60 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not ro intermediate calculations. Round your answer to the nearest whole dollar amount.)
Transcribed Image Text:Hewlard Pocket's market value balance sheet is given. Liabilities and Shareholders' Equity Assets A. Original balance sheet $ 150, e0е Debt 950, eөө Еquity $1,100,000 Value of firm Cash Other assets 1,100,000 $1,100,000 Value of firm Shares outstanding - 100,000 Price per share = $1,100,000 / 100,000 = $11 Pocket needs to hold on to $90,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $2.60 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not ro intermediate calculations. Round your answer to the nearest whole dollar amount.)
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