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vfiekz [6]
3 years ago
14

Enscoe Enterprises, Inc. (EEI) has 360,000 shares authorized, 300,000 shares issued, and 50,000 shares of treasury stock. At thi

s point, EEI has $2,350,000 of assets. $100,000 liabilities, $700,000 of common stock, and $1,550,000 of retained earnings. Further, assume that the market value of EEI's common stock is $11 per share.
Required
a. Determine the number of shares of stock that is outstanding
b. Determine the book value per share.
c. Provide a rational explanation for the difference between the book value per share and the market value per share of EEl's common stock.
Business
1 answer:
Arte-miy333 [17]3 years ago
7 0

Answer:

a. Determine the number of shares of stock that is outstanding

outstanding shares = 300,000 - 50,000 = 250,000 outstanding stocks

b. Determine the book value per share.

total stockholder equity = $700,000 + $1,550,000 = $2,250,000

book value per stock = $2,250,000 / 250,000 stocks = $9 per stock

c. Provide a rational explanation for the difference between the book value per share and the market value per share of EEl's common stock.

Several things might explain why the book value of a company differs from its market value: the company's operating model, e.g. Amazon's book value is much lower than its FMV, but the expected future profits of Amazon are huge. It also depends on the assets or liabilities that the company might have, e.g. if the company owns a lot of land or other fixed assets reported at cost which might be much lower than FMV. Other factors include the company's positive attributes, its industry, etc.

Explanation:

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3 years ago
Documents in a voucher system
amid [387]

Answer: 1 E, 2 C, 3 A, 4 F, 5 D, 6 B

Explanation:

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4 0
3 years ago
41. You own 25% of Unique Vacations, Inc. You have decided to retire and want to sell your shares in this closely held, all equi
adelina 88 [10]

Answer:

e. $6.0 million

Explanation:

The computation of the total value of the firm is shown below:

The Value of the firm is

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= $6,000,000

Hence, the total value of the firm is $6,000,000

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And, the same is to be considered  

4 0
3 years ago
Which of the following dose not apply to field
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Answer:

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7 0
2 years ago
Read 2 more answers
Suppose there are only two firms that sell smartphones: Flashfone and Pictech. The following payoff matrix shows the profit (in
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Answer:

Flashfone and Pictech

a. If Flashfone prices high, Pictech will make more profit if it chooses a (high,low) __low___ price, and if Flashfone prices low, Pictech will make more profit if it chooses a(high,low)___low____ price.

b. If Pictech prices high, Flashfone will make more profit if it chooses a(high,low)__low____price, and if Pictech prices low, Flashfone will make more profit if it chooses a (high,low) __low____ price.

c. Considering all of the information given, pricing high (is, is not) _is not_ a dominant strategy for both Flashfone and Pictech.

Explanation:

a) Data and Calculations:

                                 Pictech Pricing

                                     High        Low

Flashfone Pricing High 11, 11        2, 18

                             Low  18, 2      10, 10

b) A dominant strategy exists if Pictech or Flashfone would implement a particular strategy that benefits it no matter what the other firm does.

3 0
2 years ago
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