chapter 19 & 20
goodjob
chapter20_-_q12.xlsChapter 20
| Chapter 20 | |||
| 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." |
#11
| Chapter 20 | |||
| Question 11 | |||
| Input Area: | |||
| Stock price | $ 75 | ||
| Number of shares | 65,000 | ||
| Total assets | $ 9,400,000 | ||
| Total liabilities | $ 4,100,000 | ||
| Net income | $ 980,000 | ||
| Investment cost | $ 1,500,000 | ||
| Output Area: | |||
| ROE | |||
| NI | |||
| EPS0 | |||
| Number of new shares | |||
| EPS1 | |||
| P/E0 | |||
| P1 | |||
| P/E1 | |||
| BVPS0 | |||
| BVPS1 | |||
| Mkt to book 0 | |||
| Mkt to book 1 | |||
| NPV | |||
| Accounting dilution takes place here | |||
| because the market-to-book ratio is less | |||
| than one. Market value dilution has | |||
| occurred since the firm is investing in a | |||
| negative NPV project. |
#12
| Chapter 20 | ||||
| Question 12 | ||||
| Input Area: | ||||
| Stock price | ||||
| Number of shares | ||||
| Total assets | ||||
| Total liabilities | ||||
| Net Income | ||||
| Cost | ||||
| P/E0 | ||||
| Output Area: | ||||
| EPS1 | ||||
| Net income1 | ||||
| ROE | ||||
| If the share price after the offering is the same, | ||||
| then the project NPV is | ||||
| Accounting dilution still takes place, as the | ||||
| BVPS still falls from | $ - 0 | to | ||
| $ - 0 | , but no market | |||
| value dilution taked place because the firm is | ||||
| investing in a zero NPV project. |
