The Quick Buck Company is an all-equity firm that has been in existence for the past three years. Company management expects that the company will last for two more years and then be dissolved. The firm will generate cash flows of $800,000 next year and $1,250,000 in two years, including the proceeds from the liquidation. There are 35,000 shares of stock outstanding and shareholders require a return of 13 percent. a. What is the current price per share of the stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. The board of directors is dissatisfied with the current dividend policy and proposes that a dividend of $910,000 be paid next year. To raise the cash necessary for the increased dividend, the company will sell new shares of stock. How many shares of stock must be sold? What is the new price per share of the existing shares of stock? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Taco Time Corporation is evaluating an extra dividend versus a share repurchase. In either case, $18,000 would be spent. Current earnings are $3.30 per share, and the stock currently sells for $87 per share. There are 3,600 shares outstanding. Ignore taxes and other imperfections. What will the company's EPS and PE ratio be under the two different scenarios? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. The company with the common equity accounts shown here has declared a 10 percent stock dividend at a time when the market value of its stock is $57 per share. Show the new equity account balances after the stock dividend distribution. Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. The company has declared a dividend of $1.70 per share. The stock goes ex dividend tomorrow. Ignore any tax effects. a. What is the stock selling for today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What will it sell for tomorrow? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. What will the balance sheet look like after the dividends are paid? Note: Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32. Stockton Mineral Operations (SMO) currently has 590,000 shares of stock outstanding that sell for $92 per share. Assume no market imperfections or tax effects exist. Determine the share price and new number of shares outstanding if: Note: Do not round intermediate calculations. Round your price per share answers to 2 decimal places, e.g., 32.16, and shares outstanding answers to the nearest whole number, e.g., 32. a. SMO has a five-for-three stock split. b. SMO has a 14 percent stock dividend. c. SMO has a 40.0 percent stock dividend. d. SMO has a four-for-seven reverse stock split
