Hello Seemon, I have a simple assignment if you would like to do it. All you have to do is make a really nice Excel doc using the calculations and answers I provided in the attached word document. Please let me know if you can do it as soon as possible. Thank you.

Andrew Plaza Problem 17-7 on Ex-dividend Price Based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam's board has decided to pay out this cash as a one-time dividend. a. What is the ex-dividend price of a share in a perfect capital market? $250/500 = 0.50 Answer: the ex-dividend price of a share in a perfect capital market is 0.50 b. If the board instead decided to use the cash to do a one-time share repurchase, in a perfect capital market, what is the price of the shares once the repurchase is complete? Answer: the price of the share once the repurchase is complete is $15.00 c. In a perfect capital market, which policy in part (a) or (b) makes investors in the firm better off? Answer: For investors both policies are the same Problem 17-15 on Distribution to Shareholders Based on Chapter 17 Payout Policy Suppose that all capital gains are taxed at a 25% rate and that the dividend tax rate is 50%. Arbuckle Corporation is currently trading for $30 and is about to pay a $6 special dividend. a. Absent any other trading frictions or news, what will its share price be just after the dividend is paid? Suppose Arbuckle made a surprise announcement that it would do a share repurchase rather than pay a special dividend. Answer: t*_ d = (50% - 25%)/(1 - 25%) = 33.3%, P_ex = 30 - 6(1 - t*) = $26 b. What net tax savings per share for an investor would result from this decision? Answer: With dividend, tax would be 6 50% = $3 for dividend, with a tax savings of 4 25% = $1 for capital loss, for a net tax from the dividend of $2 per share. This amount would be saved if Arbuckle does a share repurchase instead. c. What would happen to Arbuckle's stock price upon the announcement of this change? Answer: Stock price rises to by $2 to $32 to reflect the tax savings. 2 Week 1 Homework Problem 17-19 on Dividend Capture Strategy Based on Chapter 17 Payout Policy Que Corporation pays a regular dividend of $1 per share. Typically, the stock price drops by $0.80 per share when the stock goes ex-dividend. Suppose the capital gains tax rate is 20%, but investors pay different tax rates on dividends. Absent transactions costs, what is the highest dividend tax rate of an investor who could gain from trading to capture the dividend? Answer: If the stock price drops by 80% of the dividend amount, then shareholders are indifferent if t*_d = 20%. From Eq. 17.3, (td - tg)/(1 - tg) = t*, so td = tg + t* (1 - tg) = 36%. Investors who pay a lower tax rate than 36% could gain from a dividend capture strategy. Problem 23-5 on Preferred Stock Based on Chapter 23 Raising Equity Capital Three years ago, you founded your own company. You invested $100,000 of your money and received 5 million shares of Series A preferred stock. Since then, your company has been through three additional rounds of financing. Round Series B Series C Series D TOTAL Price ($) 0.50 2.00 4.00 Number of Shares 1,000,000 500,000 500,000 7,000,000 INVESTMENT 250,000,000 500,000 2,000,000 253,500,000 a. What is the pre-money valuation for the Series D funding round? Answer: Pre-money valuation = Post Money Valuation - New Investment Pre-Money Valuation = 28000000-2000000 Pre-Money Valuation = $26,000,000.00 b. What is the post-money valuation for the Series D funding round? Answer: Post-money valuation = New Investment* Total post investment shares outstanding/ Shares issued for new investment Post-money valuation = $2000000*7000000/500000 Post-money valuation = $28,000,000.00 3 Week 1 Homework c. Assuming that you own only the Series A preferred stock (and that each share of all series of preferred stock is convertible into one share of common stock), what percentage of the firm do you own after the last funding round? Answer: Percentage of the firm do you own after the last funding round = No. of shares in series A/Total no. of shares*100 Percentage of the firm do you own after the last funding round = 5000000/7000000 Percentage of the firm do you own after the last funding round = 71.43%