1)A firm has a market value equal to its book value. Currently, the firm has excess cash of $900, other assets of $5,100, and equity of $6,000. The firm has 600 shares of stock outstanding and net income of $900. The firm has decided to spend half of its excess cash on a share repurchase program. How many shares of stock will be outstanding after the stock repurchase is completed?

555 shares

575 shares

595 shares

515 shares

535 shares

2) The balance sheet for Levy Corp. is shown here in market value terms. There are 6,000 shares of stock outstanding.

Market Value Balance SheetCash$44,900Equity$474,900Fixed assets430,000Total$474,900Total$474,900

The company has declared a dividend of $1.80 per share. The stock goes ex dividend tomorrow.

Ignoring any tax effects, what is the stock selling for today?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current stock price$per share

Ignoring any tax effects, what will it sell for tomorrow?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New stock price$per share

Ignoring any tax effects, what will the balance sheet look like after the dividends are paid?(Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

Market Value Balance SheetCash$Equity$Fixed assetsTotal$Total$

3)Lee Ann, Inc., has declared a $5.50 per-share dividend. Suppose capital gains are not taxed, but dividends are taxed at 10 percent. New IRS regulations require that taxes be withheld when the dividend is paid. The company's stock sells for $94.05 per share and is about to go ex-dividend.

What do you think the ex-dividend price will be?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

4) You own 300 shares of Abco, Inc. stock. The company has stated that it plans on issuing a dividend of $.70 a share at the end of this year and then issuing a final liquidating dividend of $2.20 a share at the end of next year. Your required rate of return on this security is 7 percent. Ignoring taxes, what is the value of one share of this stock today?

$2.80

$2.58

$2.98

$2.54

$3.03

5)Murphy's, Inc. has 20,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $9.00 a share. The balance sheet shows $65,000 in the capital in excess of par account, $20,000 in the common stock account, and $100,000 in the retained earnings account. The firm just announced a 11 percent stock dividend. What is the value of the capital in excess of par account after the dividend?

$83,600

$79,100

$81,600

$82,600

$75,600

6)The balance sheet for Levy Corp. is shown here in market value terms. There are 5,000 shares of stock outstanding.

Market Value Balance SheetCash$44,500Equity$434,500Fixed assets390,000Total$434,500Total$434,500

Instead of a dividend of $1.30 per share, the company has announced a share repurchase of $6,500 worth of stock.

How many shares will be outstanding after the repurchase?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Shares outstanding

What will the price per share be after the repurchase?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New stock price$

7) Roll Corporation (RC) currently has 445,000 shares of stock outstanding that sell for $80 per share. Assuming no market imperfections or tax effects exist, what will the share price be after:

a.RC has a five-for-three stock split?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New share price$

b.RC has a 25 percent stock dividend?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New share price$

c.RC has a 46.5 percent stock dividend?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New share price$

d.RC has a 3-for-7 reverse stock split?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New share price$

e.Determine the new number of shares outstanding in parts (a) through (d).(Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)

a.New shares outstandingb.New shares outstandingc.New shares outstandingd.New shares outstanding

8)The owners' equity accounts for Hexagon International are shown here:

Common stock ($.60 par value)$30,000Capital surplus310,000Retained earnings688,120Total owners' equity$1,028,120

a-1.If the company's stock currently sells for $20 per share and a 20 percent stock dividend is declared, how many new shares will be distributed?(Do not round intermediate calculations.)

New shares issued

a-2.Show the new equity account balances after the stock dividend is paid.(Do not round intermediate calculations.)

Common stock$Capital surplusRetained earningsTotal owners' equity$

b-1.If the company declared a 25 percent stock dividend, how many new shares will be distributed?(Do not round intermediate calculations.)

New shares issued

b-2.Show the new equity account balances after the stock dividend is paid.(Do not round intermediate calculations.)

Common stock$Capital surplusRetained earningsTotal owners' equity$

9)A firm has a market value equal to its book value. Currently, the firm has excess cash of $400 and other assets of $3,600. Equity is worth $4,000. The firm has 300 shares of stock outstanding and net income of $594. What will the new earnings per share be if the firm uses 25 percent of its excess cash to a stock repurchase?

1.52

1.83

2.44

2.03

1.22