1. Max Political Consultants Management, Inc. has decided to discontinue all of the firms business operations. The firm has a total of $7 million in debt and the fair market value of its assets is $10 million. The book value is $5 million. What will be the liquidating dividend the shareholders can expect to receive?

2. Place the following in proper chronological order, and describe the purpose of each: declaration date, ex-dividend date, record date, payment date.

3.Explain why managers of firms might prefer that their firms stock be traded in a moderate per-share range rather than a high-share price range. How do firms keep their shares trading in that range?

4.Three years ago you purchased four thousand shares of Metwa, Inc. for $17 per share. Today Metwa, Inc. is repurchasing its shares through a fixed price tender offer at a price of $45 per share. What are the after tax proceeds you will receive if the capital gains tax is 20%?

5. Why would the management of a company undertake a reverse split?

6.Use the following information to complete question:

Williams Tools Corp (Public Co)

Category Value

Market Price Per Share $12.25

Shares Outstanding 200 million

Debt $600 million

EBITDA $456 million

Net Income $4226 million

Siver Machinery Co.

Category Value

Debt $533 million

EBITDA $250 million

Debt $96 million

Calculate the earnings per share and the price earnings ratio for Williams.

7.Use the following information to complete question:

Williams Tools Corp (Public Co)

Category Value

Market Price Per Share $12.25

Shares Outstanding 200 million

Debt $600 million

EBITDA $456 million

Net Income $4226 million

Siver Machinery Co.

Category Value

Debt $533 million

EBITDA $250 million

Debt $96 million

Compute the Enterprise/EBITDA Rate for Williams.

8.Use the following information to complete question:

Williams Tools Corp (Public Co)

Category Value

Market Price Per Share $12.25

Shares Outstanding 200 million

Debt $600 million

EBITDA $456 million

Net Income $4226 million

Siver Machinery Co.

Category Value

Debt $533 million

EBITDA $250 million

Debt $96 million

Calculate the market value, the Enterprise value and the Enterprise/EBITDA for Siver.

9. You have been approached by a friend who is starting a minor league baseball team in your city. He is seeking ten investors to put up $50,000 each. Expected net cash inflows over each of the next ten years are $350,000. You believe a proper discount rate for this investment is 20%. Should you make the investment?

10. A few years ago, a friend of yours started a small business that develops gaming software. The company is doing well, and is valued at $1.5 million based on multiples for comparable public companies, after adjustments for their lack of marketability. With 300,000 shares outstanding, each share is estimated to be worth $5. Your friend, who has been serving as C.E.O. and C.T.O. (Chief Technology Officer), has decided that he lacks sufficient managerial skills to continue to build the company. He wants to sell his 160,000 shares and invest the money in an M.B.A. education. You believe you have the appropriate managerial skills to run the company. Would you pay $5 each for these shares? What are some of the factors you should consider in making this decision?

A few years ago, a friend of yours started a small business that develops gaming software. The company is doing well, and is valued at $1.5 million based on multiples for comparable public companies, after adjustments for their lack of marketability. With 300,000 shares outstanding, each share is estimated to be worth $5. Your friend, who has been serving as C.E.O. and C.T.O. (Chief Technology Officer), has decided that he lacks sufficient managerial skills to continue to build the company. He wants to sell his 160,000 shares and invest the money in an M.B.A. education. You believe you have the appropriate managerial skills to run the company. Would you pay $5 each for these shares? What are some of the factors you should consider in making this decision?