Book value of common stockholders' equity of FedEx, May 31, 2020 (figures in $ millions) Common shares ($0.10 par value per share) $ 30 Additional paid-in capital 3,097 23,722 (7,756) (369) $ 18,724 Retained earnings Treasury shares at cost Other Net common equity Note: Authorized shares (millions) Issued shares, of which: Outstanding shares Treasury shares 260 40 Required: a. Suppose that FedEx now issues 4 million shares at $180 a share. Update the table below with the new values. b. What would happen to the book value of common stockholders' equity if instead FedEx bought back 4 million shares at $180 pe share?
Q: A bank makes a loan of $10,000. The loan will be paid back after 10 years with yearly payments of…
A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…
Q: You are considering a 25-year, $1,000 par value bond. Its coupon rate is 10%, and interest is paid…
A: Bond price means the price at which a bond should trade in the market. It is the summation of…
Q: Bonds priced at a discount trade ___ their par value, A) above B) at C) below while bonds priced…
A: Bonds are financial instruments issued by governments or companies to raise capital.Bonds may be…
Q: A project costs $379 at t = 0 and generates unlevered after - tax cash flows of $50 per year…
A: Project cost$379.00After-tax cash flow$50.00Unlevered cost of capital10.50%Debt value$77.00Interest…
Q: Find the yield to maturity (%) of a 15 year, 9%, $1,000 par value semi annual bond trading at a…
A: Yield to maturity can be calculated by following function in excel=RATE (nper, pmt, pv, [fv],…
Q: Find the new balance, assuming that the bank charges 2-% per month on the unpaid balance. 2 Previous…
A: Variables in the question:Previous balance=$592.88Payment=$81.26New purchases=$50.00Bank charges per…
Q: Howell Corporation is interested in acquiring Burns Industries. Burns has 1.5 million shares…
A: Using the following CAPM model equation, the equity cost can be found by inserting given…
Q: 5. What is the rate of return for an investor who pays $1,054.47 for a 3-year bond with a 7% coupon…
A: Given information:Beginning Value (purchase price) = $1,054.47Ending Value (sale price) =…
Q: A $10,000 bond with 18%/year, compounded semiannually (interest is paid every six month) is…
A: Present worth refers to the current value of an asset that will be available at some future date…
Q: Garden-Grow Products is considering a new investment whose data are shown below. The equipment would…
A: The net present value approach is an important capital planning tool for determining the…
Q: One year ago, KJ Industries stock sold for $52 a share. Over the past year, the stock has returned…
A: Returns can be defined as the income earned through the investment by holding the underlying asset…
Q: In addition to risk free securities, you are currently invested in the Tanglewood Fund, a…
A: The Sharpe ratio is the performance measure whereby an investor evaluates the performance of the…
Q: Absolute Corporation currently has $60 million in liabilities and common equity in combination. The…
A: Optimal capital structure is that combination of debt and equity in the capital structure, that…
Q: Compute the monthly payment for a vehicle that cost 12, 300 if you finance the entire purchase over…
A: Cost of vehicle = $12,300Interest rate = 7.75%Period of loan = 4 years
Q: Seas Beginning sells clothing by mail order. An important question is when to strike a customer from…
A: A simulation model for forecasting is a computational representation of a system or process, used to…
Q: Using the data in the table: a. What was the average annual return of Microsoft stock from…
A: The unpredictability or fluctuation of investment results is referred to as risk and investments…
Q: You own 100 shares of stock in BFRL and wish that the company sticks to its current capital…
A: To maintain your earnings irrespective of the company's decision, you would need to replicate the…
Q: On January 2, current year, Kalahari Limited issued $1,000,000, 10-year bonds for $1,150,000. The…
A: Semiannual cash payments is computed by applying coupon rate on the par value of the bonds issued.It…
Q: <pected sales. 115,000 units per year mit price: $220 ariable cost: $132 xed cost: $4,890,000 he…
A: Net present value is determined by deducting the initial investment from the current value of cash…
Q: Dillard Corporation is considering an investment in a labor-saving machine. Information on this…
A: Payback period (PBP) refers to the period or duration within which the company is able to recover…
Q: Shares of stock represent ______ interest in a company. A) Cash B) Ownership C) Debt D) Special
A: The shares of stock refer to the amount of money required to be paid by the investor to get a…
Q: you invest $1,100,000 in equity into a property and the broker tells you that the property would…
A: Net operating income is the earnings derived from a property after subtracting all costs associated…
Q: Which of the following is TRUE about NPV? LO3 ⒸNPV is the ratio of a project's present value to the…
A: NPV is a financial metric used to evaluate an investment's profitability by comparing the present…
Q: Mom’s Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old…
A: Project cash flows refer to the estimated cash inflows and outflows associated with a particular…
Q: A price level adjusted mortgage (PLAM) is made with the following terms: Amount = $96,000…
A: b. To calculate the loan balance at the end of the fifth year, we need to calculate the outstanding…
Q: The following table illustrates the regression results from regressing monthly IBM excess returns on…
A: R squared = 0.268Adjusted R squared = 0.264Standard error = 0.80
Q: C Ltd. has budgeted sales fo June and July at $680,000 and $720,000, respectively. Sales are 80%…
A: > Given data:> Sales of june = 680000> Sales of july = 720000> June month collected =…
Q: Number of years to provide a given return In the information given in following case, determine the…
A: In an Ordinary Annuity , the cash flow occurs at the end of each fixed period.
Q: Problem 24-14 Abandonment Value [LO5] We are examining a new project. We expect to sell 5,300 units…
A: The objective of the question is to calculate the Net Present Value (NPV) of a project and determine…
Q: In the year 2010, the average firm in the S&P 500 Index had a total market value of five times…
A: The objective of the question is to calculate the percent return on equity for a firm given its…
Q: Sunrise, Incorporated, is trying to determine Its cost of debt. The firm has a debt Issue…
A: Cost of debt refers to the cost of issuing the debt. Debt is the finance generated from outside the…
Q: The Hangover Diner is considering a project to build a new diner next to Saint Joseph's University…
A: The net present value (NPV), a capital budgeting approach, is often used to assess investments and…
Q: A bond issued on February 1, 2004 with face value of $26600 has semiannual coupons of 9%, and can be…
A: When the bond's trading value doesn't account for the accrued interest that is computed from the…
Q: Suppose Celestial Crane Cosmetics is evaluating a proposed capital budgeting project (project Alpha)…
A: The capital budgeting tool that is widely used to evaluate various investment proposals is NPV…
Q: Tram-Ropes Limited Balance Sheet 2022 Cash 1,000,000.00…
A: WACC is the cost of capital of the company and is the weighted cost of equity,weighted cost of debt…
Q: For planning purposes, an individual wants to be able to spend $90,000 per year, at the end of each…
A: Here,Amount required for speding in retirement is $90,000Time Period of Retirement is 30 yearsTime…
Q: Assets, Incorporated, plans to issue $6 million of bonds with a coupon rate of 7.4 percent, a par…
A: Bonds that can be canceled out by repaying the bondholders before the maturity is attained is known…
Q: Determine the degree of operating leverage for each approach at current sales levels. (Round answers…
A: The degree of operating leverage (DOL) measures the percentage change in operating income relative…
Q: You are considering purchasing the bonds of UTSA that were issued 5 years ago with an original…
A: Present Value of BondThe present value of a bond refers to the current worth of all future cash…
Q: Segments of the bonds markets include a) treasury b) municipal c) agency d) corporate e) all of…
A: Features of Bonds are:-Bonds are the financial instruments issued by the government or companies to…
Q: What is the value today of receiving $4, 500 at the end of each year for the next 6 years, assuming…
A: Present value is the equivalent value of the future money based on time value of money that is…
Q: Year 12345 Returns X 20% 23 9 -16 10 Y 15% 35 14 -21 25 Using the returns shown above, calculate the…
A: Average return is a measure of the expected gain or loss on an investment over a certain period,…
Q: A corporation enters into a five-year interest rate swap with a swap bank in which it agrees to pay…
A: Swap is an arrangement between two parties to exchange cash-generating assets within definite time…
Q: In a recent 5-year period, mutual fund manager Diana Sauros produced the following percentage rates…
A: The average return is the return expected to earn on a portfolio whereas the standard deviation…
Q: Suppose that you borrow $125,000 using a 15-year loan with an annual interest rate of 4% with…
A: Present value of annuity is computed as follows:-PV=A*wherePV= present value of annuityA= periodic…
Q: A borrower with a 645 credit score is buying a $449,481 home with 95% LTV financing. The percent…
A: "home finance" means the financial plans and strategies people employ in order to buy or acquire a…
Q: Anna has a mortgage of $427,000 through her bank for property purchased. The loan is repaid by end…
A: A mortgage refers to a covered loan that is used to purchase a property with the property itself…
Q: Alli is planning to open a small gym in Óseyri. He has researched the prices of equipment and…
A: Profitability is one method based on profitability and time value of money and should be more than 1…
Q: The Blazer Company's EPS last year, EPSo, was $1.50. Blazer expects sales to increase by 15% during…
A: Degree of Total leverage (DTL)= DOL x DFLWhereDOL = Degree of operating leverage = 1.25DFL = Degree…
Q: please skip a. b and c as theyve been answered. can you please answer D
A: The strategy of buying both a call option and a put option with the same strike price and expiration…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Calculating the Number of Shares Issued Castanet Inc. issued shares of its $1. 50 par value common stock on November 9,2019, for $13 per share. In recording the issuance of the stock, Castanet credited the Additional Paid-In Capital- Common Stock account for $416,300. Required: How many shares were issued on November 9, 2019?Contributed Capital Adams Companys records provide the following information on December 31, 2019: Additional information: 1. Common stock has a 5 par value, 50,000 shares are authorized, 15,000 shares have been issued and are outstanding. 2. Preferred stock has a 100 par value, 3,000 shares are authorized, 800 shares have been issued and are outstanding. Two hundred shares have been subscribed at 120 per share. The stock pays an 8% dividend, is cumulative, and is callable at 130 per share. 3. Bonds payable mature on January 1, 2023. They carry a 12% annual interest rate, payable semiannually. Required: Prepare the Contributed Capital section of the December 31, 2019, balance sheet for Adams. Include appropriate parenthetical notes.Raun Company had the following equity items as of December 31, 2019: Preferred stock, 9% cumulative, 100 par, convertible Paid-in capital in excess of par value on preferred stock Common stock, 1 stated value Paid-in capital in excess of stated value on common stock| Retained earnings The following additional information about Raun was available for the year ended December 31, 2019: 1. There were 2 million shares of preferred stock authorized, of which 1 million were outstanding. All 1 million shares outstanding were issued on January 2, 2016, for 120 a share. The preferred stock is convertible into common stock on a 1-for-1 basis until December 31, 2025; thereafter, the preferred stock ceases to be convertible and is callable at par value by the company. No preferred stock has been converted into common stock, and there were no dividends in arrears at December 31, 2019. 2. The common stock has been issued at amounts above stated value per share since incorporation in 2002. Of the 5 million shares authorized, 3,580,000 were outstanding at January 1, 2019. The market price of the outstanding common stock has increased slowly but consistently for the last 5 years. 3. Raun has an employee share option plan where certain key employees and officers may purchase shares of common stock at 100% of the marker price at the date of the option grant. All options are exercisable in installments of one-third each year, commencing 1 year after the date of the grant, and expire if not exercised within 4 years of the grant date. On January 1, 2019, options for 70,000 shares were outstanding at prices ranging from 47 to 83 a share. Options for 20,000 shares were exercised at 47 to 79 a share during 2019. During 2019, no options expired and additional options for 15,000 shares were granted at 86 a share. The 65,000 options outstanding at December 31, 2019, were exercisable at 54 to 86 a share; of these, 30,000 were exercisable at that date at prices ranging from 54 to 79 a share. 4. Raun also has an employee share purchase plan whereby the company pays one-half and the employee pays one-half of the market price of the stock at the date of the subscription. During 2019, employees subscribed to 60,000 shares at an average price of 87 a share. All 60,000 shares were paid for and issued late in September 2019. 5. On December 31, 2019, there was a total of 355,000 shares of common stock set aside for the granting of future share options and for future purchases under the employee share purchase plan. The only changes in the shareholders equity for 2019 were those described previously, the 2019 net income, and the cash dividends paid. Required: Prepare the shareholders equity section of Rauns balance sheet at December 31, 2019. Substitute, where appropriate, Xs for unknown dollar amounts. Use good form and provide full disclosure. Write appropriate notes as they should appear in the publisher financial statements.
- Statement of Stockholders' Equity At the end of 2019, Stanley Utilities Inc. had the following equity accounts and balances: During 2020, Stanley Utilities engaged in the following transactions involving its equity accounts: Sold 3,300 shares of common stock for $15 per share. Sold 1,000 shares of 12%, $100 par preferred stock at $105 per share. Declared and paid cash dividends of $8,000. Repurchased 1,000 shares of treasury stock (common) for $38 per share. Sold 400 of the treasury shares for $42 per share. Required: Prepare the journal entries for Transactions a through e. Assume that 2020 net income was $87,000. Prepare a statement of stockholders equity at December 31, 2020.Outstanding Stock Lars Corporation shows the following information in the stockholders equity section of its balance sheet: The par value of common stock is S5, and the total balance in the Common Stock account is $225,000. There are 13,000 shares of treasury stock. Required: What is the number of shares outstanding? Use the following information for Exercises 10-58 and 10-59: Stahl Company was incorporated as a new business on January 1, 2019. The company is authorized to issue 600,000 shares of $2 par value common stock and 80,000 shares of 6%, S20 par value, cumulative preferred stock. On January 1, 2019, the company issued 75,000 shares of common stock for $15 per share and 5,000 shares of preferred stock for $25 per share. Net income for the year ended December 31, 2019, was $500,000.Treasury Stock, Cost Method Bush-Caine Company reported the following data on its December 31, 2018, balance sheet: The following transactions were reported by the company during 2019: 1. Reacquired 200 shares of its preferred stock at 57 per share. 2. Reacquired 500 shares of its common stock at 16 per share. 3. Sold 100 shares of preferred treasury stock at 58 per share. 4. Sold 200 shares of common treasury stock at 17 per share. 5. Sold 100 shares of common treasury stock at 9 per share. 6. Retired the shares of common stock remaining in the treasury. The company maintains separate treasury stock accounts and related additional paid-in capital accounts for each class of stock. Required: 1. Prepare the journal entries required to record the treasury stock transactions using the cost method. 2. Assuming the company earned a net income in 2019 of 30.000 and declared and paid dividends of 10,000, prepare the shareholders equity section of its balance sheet at December 31, 2019.
- Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.Statement of Stockholders' Equity At the end of 2019, Stanley Utilities Inc. had the following equity accounts and balances: During 2020, Haley engaged in the following transactions involving its equity accounts: Sold 5,000 shares of common stock for $19 per share. Sold 1.200 shares of 12%, $50 par preferred stock at $75 per share. Declared and paid cash dividends of $22,000. Repurchased 1,000 shares of treasury stock (common) for $24 per share. Sold 300 of the treasury shares for $26 per share. Required: Prepare the journal entries for Transactions a through e. Assume that 2020 net income was $123,700. Prepare a statement of stockholders equity at December 31, 2020.Common Dividends Thompson Payroll Service began in 2019 with 1,500,000 authorized and 820,000 issued and outstanding S8 par common shares. During 2019, Thompson entered into the following transactions: Declared a S0.20 per-share cash dividend on March 24. Paid the S0.20 per-share dividend on April 6. Repurchased 13,000 common shares for the treasury at a cost of S12 each on May 9. Sold 2,500 unissued common shares for $15 per share on June 19. Declared a $0.40 per-share cash dividend on August 1. Paid the $0.40 per-share dividend on September 14. Declared and paid a 10% stock dividend on October 25 when the market price of the common stock was $15 per share. Declared a 50.45 per-share cash dividend on November 20. Paid the $0.45 per-share dividend on December 20. Required: Prepare journal entries for each of these transactions. (Note: Round to the nearest dollar.) What is the total dollar amount of dividends (cash and stock) for the year? CONCEPTUAL CONNECTION Determine the effect on total assets and total stockholders equity of these dividend transactions.
- Stockholders' Equity Terminology A list of terms and a list of definitions or examples are presented below. Make a list of the numbers 1 through 12 and match the letter of the most directly related definition or example with each number Definitions and Examples Capitalizes retained earnings. Shares issued minus treasury shares. Emerson Electric will pay a dividend to all persons holding shares of its common stock on December 15, 2019, even if they just bought the shares and sell them a few days later. The accumulated earnings over the entire life of the corporation that have not been paid out in dividends. Common Stock account balance divided by the number of shares issued. The state of Louisiana set an upper limit of 1,000,000 on the number of shares that Gumps Catch Inc. can issue. Shares that never earn dividends. Any changes to stockholders equity from transactions with no owners. A right to purchase stock at a specified future time and specified price. j. A stock issue that requires no journal entry. k. Shares that may earn guaranteed dividends. 1. On October 15, 2019, General Electric announced its intention to pay a dividend on common stock.Lyon Company shows the following condensed income statement information for the year ended December 31, 2019: Lyon declared dividends of 6,000 on preferred stock and 17,280 on common stock. At the beginning of 2019, 10,000 shares of common stock were outstanding. On May 1, 2019, the company issued 2,000 additional common shares, and on October 31, 2019, it issued a 20% stock dividend on its common stock. The preferred stock is not convertible. Required: 1. Compute the 2019 basic earnings per share. 2. Show the 2019 income statement disclosure of basic earnings per share. 3. Draft a related note to accompany the 2019 financial statements.Book value of common stockholders' equity of FedEx, May 31, 2020 (figures in $ millions) Common shares ($0.10 par value per share) Additional paid-in capital Retained earnings Treasury shares at cost Other Net common equity Note: Authorized shares (millions) Issued shares, of which: Outstanding shares Treasury shares Required: $ 38 3,094 23,719 (7,711) (366) $ 18,774 332 48 a. Suppose that FedEx now issues 7 million shares at $130 a share. Update the table below with the new values. b. What would happen to the book value of common stockholders' equity if instead FedEx bought back 7 million shares at $130 per share? Complete this question by entering your answers in the tabs below. Required A Required B Suppose that FedEx now issues 7 million shares at $130 a share. Update the table below with the new values. Note: Negative amounts should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place. Common shares ($0.10 par value per share) $ 0.7 909.3…