million shares of common stock outstanding at a book value of $2 per share. The stock trades for $2.50 per share. It also has $1 million in face value of debt that trades at 120% of par. What is its ratio of debt to value for WACC purposes? $2 million shares ⋅ $2.50 = $5,000,000 $1 million debt ⋅ 20% = $1,200,000 Total Value = $6,200,000 [pic] 4. What is the after-tax cost of preferred stock that sells for $5 per share and offers a $0.75 dividend when the
Words: 955 - Pages: 4
days B. receiving dividend payments every 30 days C. converting the T-bill at maturity into a higher valued T-note D. buying the bill at a discount from the face value received at maturity 9. ______ would not be included in the EAFE index. A. Australia B. Canada C. France D. Japan 10. _____ is considered to be an emerging market country. A. France B. Norway C. Brazil D. Canada 11. Which one of the following is a true statement? A. Dividends on preferred stocks
Words: 7367 - Pages: 30
stock Reacquisition of shares: treasury stock Preferred stock Dividend policy Presentation and analysis 2 The corporate classification Ownership form Public sector corporations: such as stated- owned Private sector corporations: Profit oriented non-profit profit-seeking Stock company 3 Capital stock system In the absence of restrictions, each share carries the following rights: To share proportionately in profits and losses. To share proportionately in management
Words: 2210 - Pages: 9
eddine Boussouf Nadezda Vovk 1) Common stock: a share of ownership in the corporation, which confers rights to any common dividends as well as rights to vote on election of directors, mergers, or other major events. Preferred stock: A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights. Preferred
Words: 1128 - Pages: 5
This case covers a wide range of financial policy issues: the competitive dynamics of innovation; the appropriate capital | |structure for a firm in a highly innovative business; the fundamentals of cash disbursement policy; common stock repurchases; and | |consideration of more complex hybrid securities. Intel needs to change its financial policies as they grow/mature into a cash cow from a | |startup. The case revolves around an understanding of the Microprocessor Industry
Words: 2483 - Pages: 10
31-Mar-14 31-Dec-10 5.2 14.2 80.0 12.0 7.0 Notes 3.2% coupon Due 5/31/2010 7.5% coupon, amortizing Bond Amortizing portion 4.5% coupon, conversion price $25, 1 bond of Fair value $100 converts into 4 shares 9.0 3% coupon, conversion price $20, 1 preferred stock of Fair value $18 converts into 1 share UNDERSTANDING THE CAPITAL STRUCTURE OF THE FIRM Short Term Borrowings: Short term borrowings is an account shown in the current liabilities portion of a company's balance sheet. This account is comprised
Words: 2396 - Pages: 10
65 Profitability Return on Sales 2011: $227,575/$2,656,949 = $0.08 2010: $147,138/$1,991,139 = $0.07 2009: $101,017/$1,565,887 = $0.06 Growth 5 yr. annual growth – 13.35% 5 yr. revenue growth – 9.91% 5 yr. dividend growth – 7.74% 5 year EPS growth – 18.68% Investments Dividend Yield - $1.35/$79.90 = 1.6% (using 2011’s annual divided) Yamaha Current Ratios Current Ratio 2011: $561,205/$366,415 = 1.53 Current Ratio 2010: $639,028/$365,131 = 1.75 Current Ratio 2009: $620,800/$379,698 =
Words: 1567 - Pages: 7
repay its initial loan. Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase, for which the loan was initially requested, was a major cash disbursement of $3 million. In the period between November 1978 and August 1979, stock repurchase represented 58% of total expenditures for that period, while inventory purchases represented 42% of total expenditures. They also had a difficult time repaying because
Words: 1390 - Pages: 6
TO: VICTOR DUBINSKI FROM: CLAUDIA ZHAO SUBJECT: REVIEW OF BLAINE KITCHENWARE DATE: February 9, 2016 Based on the analysis of Blaine Kitchenware’s capital structure, I recommend share repurchase. Stock repurchase would result in a change in firm value and stock price for Blaine Kitchenware, and it will also contribute to optimal debt capacity through allowing the firm to utilize tax deductible financing. Blaine currently faces many risks as a result of the surplus cash including takeover threat
Words: 605 - Pages: 3
per share declined by 16% from 1998-2004 (Exhibit 5). The company restructured itself and focused more resources on innovation. By late 2004 the company started to turn around its attrition with a positive growth outlook. In August 2005, Ashley Swenson, the Chief Financial Officer of Gainesboro, was considering 3 dividend policies to implement; a zero-dividend payout, a 40% dividend payout or $0.20 a share, or a residual dividend payout. Discussion Dividend Policy Choices 1. Zero-dividend payout:
Words: 1382 - Pages: 6
