Answer:
The value per share of common stock today is $23.94
Explanation:
To calculate the worth of the stock today, we first need to calculate the value of firm using FCF and then calculate the value of equity by deducting the market value of debt and preferred stock from the value of firm. Then we will divide the value of equity by the number of common stock shares.
Value of firm will be calculated using the discounted cash flows model approach. The value of firm will be,
Value of firm = 780000 * (1+0.1) / (1+0.13) + 780000 * (1+0.1) * (1+0.08) / (1+0.13)^2 + 780000 *(1+0.1)*(1+0.08)*(1+0.07) / (1+0.13)^3 +
[ 780000 *(1+0.1) *( 1+0.08) *(1+0.07) *(1+0.06)) / (0.13 - 0.06)] / (1+0.13)^3
Value of firm = $12,577,754.16
Value of equity = $12,577,754.16 - (2000000 + 1000000) = $9,577,754.159
Value per share = $9,577,754.159 / 400000
Value per share = $23.944 rounded off to $23.94
Answer:
Lowland, Inc., entry to record this conversion includes a
Dr Bonds Payable $900,000
Cr Common Stock $540,000
( 90,000 shares x $6 par value per share)
Cr Paid-In Capital in Excess of Par Value $360,000
($900,000 -$540,000)
Explanation:
Since Lowland, Inc. converted its $900,000 par value bonds and carrying value also $900,000) into 90,000 shares of $6 par value common stock which means we have to Debit Bonds Payable with $900,000 and Credit Common Stock with $540,000 which is
( 90,000 shares x $6 par value per share) , then Credit Paid-In Capital in Excess of Par Value for $360,000 which is ( value of bonds converted of $900,000 - par value of shares of common stock issued of $540,000).
Answer:
The correct answer is letter "E": All of the above.
Explanation:
The Generalized Audit Software or GAS is a computer-based tool designed to carry out routine audits inside a company. It imports generalized data so then samples can be browsed to later be analyzed. The data is stored based on certain criteria identifiers for easiness in the search. Besides, confirmations of account receivables can be printed from the software.
Answer:
$14,800
Explanation:
We will get the Net Income by preparing Trial-account of Retained earnings.
Retained earnings
Cash dividend $7,500 Beginning balance $50,000
Stock dividend $5,000 Net Income $14,800 (Balance figure)
Ending balance <u>$52,300</u> <u> </u>
Total <u>$64,800</u> <u>$64,800</u>
Answer: $169470
Explanation: Firstly, we'll calculate the discount on bond which will be:
= Issue Price - Par Value
= $3,000,000 - $2,817,000
= $183,000
Then, the interest payable will be:
= Coupon Rate × Bond ParValue
= $3,000,000 × 8%
= $3,000,000 × 0.08
= $240,000
We will calculate the interest expense as:
= Issue Value × Market Rate
= $2,817,000 × 9%
= $253,530
Then, the amortized amount for Year 1 will be:
= Interest Expense - Interest Payable
= $253,530 - $240,000
= $13,530
Therefore, the unamoritzed amount of bond discount will be:
= $183,000 - $13,530
= $169,470
