Your task is to analyze Puyol Corp.'s reorganization plan. Puyol Corp. has reported losses for the past three years and has finally decided to file for bankruptcy. You know that the company has preferred stock A that has a par value of $118.00, pays a dividend of $7 per share, and that there are 1,600,000 shares of this class outstanding. Preferred stock B is callable at $175, has 80,000 shares outstanding, and pays a dividend of $11.00 per share. The company's common stock has a par value of $3.00 and has 8,000,000 shares outstanding. You have also collected the following data from the company's financial statements: Current assets Puyol Corp. Data from Financial Statements (Millions of dollars) Balance Sheet Income Statement $588.00 Current liabilities $147.00 Net sales 535.50 Advance payments 273.00 Operating expense 52.50 Reserves 21.00 Net operating income Class A Preferred stock 188.80 Other income Net fixed assets $1,890.00 1,806.00 84.00 Goodwill 10.50 Class B Preferred stock 14.00 EBT 94.50 Common stock 24.00 Taxes (50%) 47.25 Retained earnings 508.20 Net Income 47.25 25.20 Dividends on Class A Preferred stock Dividends on Class B Preferred stock 2.10 Total assets $1,176.00 Total claims $1,176.00 Income available to common stockholders $19.95 Puyol's creditors have agreed to a voluntary reorganization plan with the following settlements: Each share of preferred stock A will be exchanged for one share of preferred stock C with a par value of $39.33 that pays a dividend of $2.80 per share, plus one 8% subordinated income debenture that carries a par value of $78.67. Preferred stock B that pays a dividend of $11.00 per share will be settled with cash at a call price of $175. Based on the information you have, calculate and fill in the values in the pro-forma financial statements of Puyol Corp. for the reorganization plan. Puyol Corp. Pro-Forma Financial Statements Based on Reorganization Plan (Millions of dollars) Balance Sheet Income Statement Current assets Current liabilities $147.00 Net sales Operating expense $1,890.00 1,806.00 Net fixed 535,50 Advance payments 273.00 assets Goodwill 52.50 21.00 Net operating income 84.00 Reserves Subordinated debenture Other income 10.50 EBIT 94.50 $2.80 preferred stock C C claims Common stock 24.00 Interest expense Retained earnings 508.20 EBT Taxes (50%) Net income Dividends on $2.80 preferred Income available to common stockholders Total assets Total claims Thus, income available for common stockholders will increase after the reorganization takes place. , . Your task is to analyze Puyol Corp.'s reorganization plan. Puyol Corp. has reported losses for the past three years and has finally decided to file for bankruptcy. You know that the company has preferred stock A that has a par value of $118.00, pays a dividend of $7 per share, and that there are 1,600,000 shares of this class outstanding. Preferred stock B is callable at $175, has 80,000 shares outstanding, and pays a dividend of $11.00 per share. The company's common stock has a par value of $3.00 and has 8,000,000 shares outstanding. You have also collected the following data from the company's financial statements: Current assets Puyol Corp. Data from Financial Statements (Millions of dollars) Balance Sheet Income Statement $588.00 Current liabilities $147.00 Net sales 535.50 Advance payments 273.00 Operating expense 52.50 Reserves 21.00 Net operating income Class A Preferred stock 188.80 Other income Net fixed assets $1,890.00 1,806.00 84.00 Goodwill 10.50 Class B Preferred stock 14.00 EBT 94.50 Common stock 24.00 Taxes (50%) 47.25 Retained earnings 508.20 Net Income 47.25 25.20 Dividends on Class A Preferred stock Dividends on Class B Preferred stock 2.10 Total assets $1,176.00 Total claims $1,176.00 Income available to common stockholders $19.95 Puyol's creditors have agreed to a voluntary reorganization plan with the following settlements: Each share of preferred stock A will be exchanged for one share of preferred stock C with a par value of $39.33 that pays a dividend of $2.80 per share, plus one 8% subordinated income debenture that carries a par value of $78.67. Preferred stock B that pays a dividend of $11.00 per share will be settled with cash at a call price of $175. Based on the information you have, calculate and fill in the values in the pro-forma financial statements of Puyol Corp. for the reorganization plan. Puyol Corp. Pro-Forma Financial Statements Based on Reorganization Plan (Millions of dollars) Balance Sheet Income Statement Current assets Current liabilities $147.00 Net sales Operating expense $1,890.00 1,806.00 Net fixed 535,50 Advance payments 273.00 assets Goodwill 52.50 21.00 Net operating income 84.00 Reserves Subordinated debenture Other income 10.50 EBIT 94.50 $2.80 preferred stock C C claims Common stock 24.00 Interest expense Retained earnings 508.20 EBT Taxes (50%) Net income Dividends on $2.80 preferred Income available to common stockholders Total assets Total claims Thus, income available for common stockholders will increase after the reorganization takes place
