Q1Consider the following hypothetical company A's market value balance sheet: Net working capital $20 $25 Bonds outstanding Fixed assets $10 $5 Common stock Total assets $30 $30 Total value Determine who gains and who loses from the following situations: 1. Company A puts bits and pieces together to come up with $5 in cash and pays a cash dividend. (10 pts.) 2. Company A halts operations, sells its fixed assets, and converts net working capital into $20 cash. (10 pts.) 3. Company A finds an acceptable investment opportunity: It can invest $10 in a project with NPV = 0. The firm borrows to finance the project. The new debt has the same characteristic as the old. (10 pts.) 4. Suppose the new project has NPV pts.) +2 and is financed by an issue of preferred stock. (10 5. The firm's lenders agree to extend the maturity of their loan from one year to two in order to give company A a chance to recover. (10 pts.) Q1Consider the following hypothetical company A's market value balance sheet: Net working capital $20 $25 Bonds outstanding Fixed assets $10 $5 Common stock Total assets $30 $30 Total value Determine who gains and who loses from the following situations: 1. Company A puts bits and pieces together to come up with $5 in cash and pays a cash dividend. (10 pts.) 2. Company A halts operations, sells its fixed assets, and converts net working capital into $20 cash. (10 pts.) 3. Company A finds an acceptable investment opportunity: It can invest $10 in a project with NPV = 0. The firm borrows to finance the project. The new debt has the same characteristic as the old. (10 pts.) 4. Suppose the new project has NPV pts.) +2 and is financed by an issue of preferred stock. (10 5. The firm's lenders agree to extend the maturity of their loan from one year to two in order to give company A a chance to recover. (10 pts.)