6. Reorganization plan Your task is to analyze Puyol Corp.'s reorganization plan. Puyol Corp. has reported losses for the past three years and has finally decided to file for bankruptcy. You know that the company has preferred stock A that has a par value of $124.00, pays a dividend of $8 per share, and that there are 1,400,000 shares of this class outstanding. Preferred stock B is callable at $160, has 70,000 shares outstanding, and pays a dividend of $11.00 per share. The company's common stock has a par value of $3.00 and has 7,000,000 shares outstanding. You have also collected the following data from the company's financial statements: $2,160.00 2,064.00 96.00 12.00 Puyol Corp. Data from Financial Statements (Millions of dollars) Balance Sheet Income Statement Current assets $672.00 Current liabilities $168.00 Net sales Net fixed assets 612.00 Advance payments 312.00 Operating expense Goodwill 60.00 Reserves 24.00 Net operating income Class A Preferred stock 173.60 Other income Class B Preferred stock 11.20 EBT Common stock 21.00 Taxes (50%) Retained earnings 634.20 Net income Dividends on Class A Preferred stock Dividends on Class B Preferred stock Total assets $1,344.00 Total claims $1,344.00 Income available to common stockholders 108.00 54.00 54.00 28.80 2.40 $22.80 Puyol's creditors have agreed to a voluntary reorganization plan with the following settlements: Each share of preferred stock A will be exchanged for one share of preferred stock C with a par value of $41.33 that pays a dividend of $3.20 per share, plus one 11% subordinated income debenture that carries a par value of $82.67. Preferred stock B that pays a dividend of $11.00 per share will be settled with cash at a call price of $160. Based on the information you have, calculate and fill in the values in the pro-forma financial statements of Puyol Corp. for the reorganization plan. $2,160.00 2,064.00 96.00 12.00 108.00 Puyol Corp. Pro-Forma Financial Statements Based on Reorganization Plan (Millions of dollars) Balance Sheet Income Statement Current assets Current liabilities $168.00 Net sales Net fixed 612.00 Advance payments 312.00 Operating expense assets Goodwill 60.00 Reserves 24.00 Net operating income Subordinated debenture Other income $3.20 preferred stock C EBIT claims Common stock 21.00 Interest expense Retained earnings 634.20 Taxes (50%) Net income Dividends on $3.20 preferred Total assets Total claims Income available to common stockholders 111111 Thus, income available for common stockholders will after the reorganization takes place