chapter 19 & 20
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2014-06-15_233340_6.4.xlsxChapter 19
| Chapter 19 | |||
| Problems 2, 4, 6, 10 | |||
| Input boxes in tan | |||
| Output boxes in yellow | |||
| Given data in blue | |||
| Calculations in red | |||
| Answers in green | |||
| NOTE: Some functions used in these spreadsheets may require that | |||
| the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. | |||
| To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak" | |||
| and "Solver Add-In." | |||
#2
| Chapter 19 | |||
| Question 2 | |||
| Input Area: | |||
| Common stock | $ 30,000 | ||
| Par value | $ 1 | ||
| Capital surplus | $ 185,000 | ||
| Retained earnings | $ 627,500 | ||
| Total owners' equity | |||
| a. | Stock price | $ 37 | |
| Stock dividend | 10% | ||
| b. | Stock dividend | 25% | |
| Output Area: | |||
| a. | New shares outstanding | ||
| New shares issued | |||
| Capital surplus on new shares | |||
| Common stock | |||
| Capital surplus | |||
| Retained earnings | |||
| b. | New shares outstanding | ||
| New shares issued | |||
| Capital surplus on new shares | |||
| Common stock | |||
| Capital surplus | |||
| Retained earnings | |||
#4
| Chapter 19 | ||||||
| Question 4 | ||||||
| Input Area: | ||||||
| Shares outstanding | 330,000 | |||||
| Stock price | $ 64.00 | |||||
| a. | Stock split | 5 | for | 3 | ||
| b. | Stock dividend percent | 15.00% | ||||
| c. | Stock dividend percent | 42.50% | ||||
| d. | Stock split (shares) | 4 | for | 7 | ||
| Output Area: | ||||||
| a. | Stock split | |||||
| b. | Stock dividend | |||||
| c. | Stock dividend | |||||
| d. | Stock split | |||||
| e. | a. | New shares outstanding | ||||
| b. | New shares outstanding | |||||
| c. | New shares outstanding | |||||
| d. | New shares outstanding | |||||
#6
| Chapter 19 | ||||||
| Question 6 | ||||||
| Input Area: | ||||||
| Repurchase | $ 22,800 | |||||
| Shares outstanding | 12,000 | |||||
| Dividend per share | $ 1.90 | |||||
| Market Value Balance Sheet | ||||||
| Cash | $ 55,000 | Equity | $ 465,000 | |||
| Fixed assets | $ 410,000 | |||||
| Total | $ 465,000 | Total | $ 465,000 | |||
| Output Area: | ||||||
| Repurchasing the shares will reduce | ||||||
| shareholders' equity by | ||||||
| Shares bought | ||||||
| New shares outstanding | ||||||
| Price after repurchase | ||||||
| New equity balance | ||||||
| The repurchase is effectively the same as the cash dividend because | ||||||
| you either hold a share worth | ||||||
| or a share worth | and | in cash. | ||||
| Therefore you participate in the repurchase according to the | ||||||
| dividend payout percentage; you are unaffected. | ||||||
#10
| Chapter 19 | |||
| Question 10 | |||
| Input Area: | |||
| Discount rate | 10% | ||
| Shares outstanding | 220,000 | ||
| Stock price | $ 110 | ||
| Dividend in one year | $ 4.00 | ||
| c. | Initial investment amount | $ 4,500,000 | |
| Net income earned | $ 1,900,000 | ||
| Output Area: | |||
| a. | Stock price | ||
| b. | Stock price | ||
| c. | Shares to sell | ||
| d. | The MM model is not realistic since it does | ||
| not account for taxes, brokerage fees, | |||
| uncertainty over future cash flows, investors' | |||
| preferences, signaling effects, and agency | |||
| costs. | |||
