Question
For the year 2021 the company presented the following abbreviated results and balance sheet items: (all figures in million ) Revenues 4300 Gross Profit 1200
For the year 2021 the company presented the following abbreviated results and balance sheet items: (all figures in million ) Revenues 4300 Gross Profit 1200 Operating Income 750 Interest expenses 50 Taxes 175 Total Assets 2500 Current Liabilities 500 Long term debt 1000 Common stock 500 Retained Earnings 350 Net income 2021 150 The company has 500 thousand shares outstanding at a par value of 1000. The market value of the shares today is 7500 Mr Andersen, who has 10% of the shares is proposing to make a dividend payment in cash for 30 Million Mrs Bettermore, the CEO, holding 1% of the shares is proposing to make a stock dividend with a value of 30 Million. You are the CFO of the company, so they are requesting you to prepare: Balance sheet of the company in the case of Mr Andersen dividend payment Balance sheet of the company in the case of Mrs Bettermores stock dividend. And you also want to prepare your own proposal buying the company shares for a total amount of 30 Millions. Calculate number of shares, EPS, PE ratio, Return on sales, ROE, ROA before doing anything, and also after each of the 3 alternatives. In case you finally choose the option of Mr Andersen, what will be the final market value of the shares if you decide to make a split 2 for 1?
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