4th Edition

ISBN: 9781323942925

Author: Berk

Publisher: PEARSON

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Textbook Question

Chapter 17, Problem 23P

FCF Co. has 20,000 shares outstanding and a total market value of $1 million, $300 thousand of which is debt and the other $700 thousand is equity. It is planning a 10% stock dividend.

a. What is the stock price before the dividend and what will it be after the dividend?
b. If an investor owns 1000 shares before the dividend, what will be the total value of her investment in FCF before and after the dividend?

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Chapter 17, Problem 22P

Chapter 17, Problem 24P

Chapter 17 Solutions

FUNDAMENTAL OF CORPORATE FINANCE

Ch. 17 - Prob. 1CC Ch. 17 - Prob. 2CC Ch. 17 - Prob. 3CC Ch. 17 - Prob. 4CC Ch. 17 - Prob. 5CC Ch. 17 - Prob. 6CC Ch. 17 - Prob. 7CC Ch. 17 - Prob. 8CC Ch. 17 - Prob. 9CC Ch. 17 - Prob. 10CC

Ch. 17 - Prob. 11CC Ch. 17 - Prob. 12CC Ch. 17 - Prob. 1CQ Ch. 17 - Prob. 2CQ Ch. 17 - Prob. 3CQ Ch. 17 - Prob. 4CQ Ch. 17 - Prob. 5CQ Ch. 17 - Prob. 6CQ Ch. 17 - Prob. 1CT Ch. 17 - Prob. 2CT Ch. 17 - Prob. 3CT Ch. 17 - Prob. 4CT Ch. 17 - Prob. 5CT Ch. 17 - Prob. 6CT Ch. 17 - 7. Explain under which conditions an increase in...Ch. 17 - Prob. 8CT Ch. 17 - Prob. 9CT Ch. 17 - Prob. 1DC Ch. 17 - Prob. 2DC Ch. 17 - Prob. 3DC Ch. 17 - Prob. 4DC Ch. 17 - Prob. 5DC Ch. 17 - Prob. 6DC Ch. 17 - Prob. 7DC Ch. 17 - Prob. 8DC Ch. 17 - Prob. 1P Ch. 17 - Prob. 2P Ch. 17 - Prob. 3P Ch. 17 - Prob. 4P Ch. 17 - Prob. 5P Ch. 17 - Prob. 6P Ch. 17 - 7. Natsam Corporation has $250 million of excess...Ch. 17 - 8. Suppose the board of Natsam Corporation decided...Ch. 17 - 9. The HNH Corporation will pay a constant...Ch. 17 - Prob. 10P Ch. 17 - Prob. 11P Ch. 17 - Prob. 12P Ch. 17 - Prob. 13P Ch. 17 - 14. Assume perfect capital markets. Kay Industries...Ch. 17 - Prob. 15P Ch. 17 - Prob. 16P Ch. 17 - Prob. 17P Ch. 17 - Prob. 18P Ch. 17 - Prob. 19P Ch. 17 - Prob. 20P Ch. 17 - Prob. 21P Ch. 17 - AMC Corporation currently has an enterprise value...Ch. 17 - FCF Co. has 20,000 shares outstanding and a total...Ch. 17 - Prob. 24P Ch. 17 - Prob. 25P Ch. 17 - Prob. 26P

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Bayani Bakerys most recent FCF was 48 million; the FCF is expected to grow at a constant rate of 6%. The firms WACC is 12%, and it has 15 million shares of common stock outstanding. The firm has 30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has 368 million in debt and 60 million in preferred stock. a. What is the value of operations? b. Immediately prior to the repurchase, what is the intrinsic value of equity? c. Immediately prior to the repurchase, what is the intrinsic stock price? d. How many shares will be repurchased? How many shares will remain after the repurchase? e. Immediately after the repurchase, what is the intrinsic value of equity? The intrinsic stock price?

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