Haslem, Inc. has 3 million shares of common stock outstanding, 1 million shares of preferred stock, and 80,000 bonds. The common
stock is selling for $50 per share, the preferred stock is selling for $33 per share, and the bonds are 25 year, 8.5%, $1,000 bonds that are presently selling for $1,080 (semiannual interest). The preferred stock pays an annual dividend of $2.70, and the common dividend paid in the year just ended was $2.40. The dividend on the common stock is projected to grow at a rate of 6% indefinitely
Issuance capital of 500,000 shall remain constant. Out of the current year net earnings 25000 we are paying 2000 as dividend so, that adds to the owners equity = 23000.
Total liabilities = total assets = 500000 + 23000 + 94000 = 617000
Milton Friedman is an American economist that believed in the free market capitalism. He was a free market advocate. He therefore advocated that the social responsibility of a manager is to maximize shareholders returns.
