intro to corprate finance

6. Corporate Agency Issues (L04) Who owns a corporation? Describe the process whereby the owners control the firm's management. What is the main reason that an agency relationship exists in the corporate form of organization? In this context, what kind of problems can arise ? JESTIONS AND PROBLEMS Basic (Questions 1-12) 1. Building a Statement of Financial Position (L01) Oakville Pucks Inc. has current assets of $4.900, net fixed assets of $27.500, current liabilities of $4,200, and long-term debt of $10,500. What is the value of the shareholders' equity account for this firm? How much is net working capital? 2. Building an Statement of Comprehensive Income (L01) Burlington Exterminators Inc. has sales of $734,000 costs of $315,000, depreciation expense of $48.000, interest expense of $35,000 and a tax rate of 35 percent. What is the net income for this firm? 3. Dividends and Retained Earnings (L01) Suppose the firm in Problem 2 paid out $85,000 in cash Wividends What is the addition to retained earnings? 4. Per-Share Earnings and Dividends (LO1) Suppose the firm in Problem 3 had 110,000 shares of common stock outstanding What is the earnings per share, or EPS, figure? What is the dividends per share figure? 5. Market Values and Book Values (L01) Kimbo Widgets Inc. purchased new cloaking machinery three years ago for $7 million. The machinery can be sold to the Rimalons today for $4.9 million. Kimbo's current statement of financial position shows net fixed assets of $3.7 million current liabilities of $1.1 million, and net working capital of $380,000. If all the current in 16 million cash What is the book