Review the annual report of MCI and answer the following questions.

a. As of December 31, 1994, how many preferred and common shares was MCI authorized to issue? How was this established?

b. MCI had a major preferred stock issuance during 1993. How many shares were issued, how much cash was collected, and why were the shares issued?

c. MCI had a major common stock issuance during 1994. How many shares were issued, how much cash was collected, and explain why the shares were issued?

d. How many treasury shares did MCI purchase in 1992, 1993, and 1994? Compute the aver¬ age price at which the shares were purchased in each of the three years. How many trea¬ sury shares were reissued during each of the three years, and for what purpose?

e. Does MCI maintain a dividend rate that is a constant percent of reported net income each year? Would you consider MCI a company that pays high or low dividends? Provide a plausible explanation for why they have chosen such a strategy.

f. How did MCI account for the stock dividend (split) it recorded in 1992? What effect did this event have on the company’s debt/equity ratio?