In 1993, International Business Machines (IBM) reported a record loss of $8,101,000,000 and also stopped paying cash dividends. Today IBM is thriving as the largest provider of com- puter hardware in the world. It produces PCs, notebooks, mainframes, servers, and peripher- als, along with software, where it is second only to Microsoft. 1. Go to http://www.ibm.com and in the left-hand column, click on Investors. What is the current market price of IBM stock? 2. In the left-hand column, click on Financials and then Stock split information. Describe the most recent stock split and note the date of the payment (distribution) of the split shares. What effect would this stock split have on the par value per share? on total stockholders' equity? 3. In the left-hand column, click on Annual reports and select the most recent annual report. Click on Financial Report, and then under "Consolidated Financial Statements (Audited)." click on Earnings. Does IBM report any special items on the income statement? If so, what are they and what are their amounts? For the most recent year, show how IBM computed basic earnings per share of common stock. 4. At the bottom of the screen, click on next page to display the "Consolidated Statement of Financial Position."

a. How many types of stock has IBM issued? List them. What is the par value share per of the common shares? As of the most recent balance sheet date, how many common shares has IBM issued? How many shares of common stock would receive a cash divi- dend? (Note: Treat the shares in the Employee Benefits Trust the same as Treasury Stock shares. Both of these accounts contain only common shares.)

b. As of the most recent balance sheet date, how much have shareholders paid in total for the common shares issued? What was the average issue price per common share? How much has IBM paid in total to repurchase treasury stock? What was the average price paid per treasury share? Compare the average issue price, average price paid for treasury stock, and the current market price. What conclusions can you draw about when IBM purchased the treasury stock?