Hewlard Pocket's market value balance sheet is given.AssetsA. Original balance sheetCashOther assetsValue of firm$ 150,000 DebtShares outstanding = 100,000Price per share = $1,100,000/100,000 = $11Liabilities and Shareholders' Equity950,000 Equity$ 1,100,000 Value of firma. Stock priceb. Stock pricePocket wins a lawsuit and is paid $200,000 in cash. The market value of the equity rises by that amount, and Pocket decides to makea one-off payout of $3.00 per share.$01,100,000$ 1,100,000a. What will be Pocket's stock price after the payout if the payout comes as a cash dividend?b. What will be Pocket's stock price after the payout if the payout comes as a share repurchase?Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.per shareper share

Stock price after cash dividend can be calculated by using equation belowStock price after cash…

Hewlard Pocket's market value balance sheet is given. Assets A. Original balance sheet Cash Other assets Value of firm $ 150,000 950,000 Debt Equity $1,100,000 Value of firm Shares outstanding = 100,000 Price per share = $1,100,000/100,000 = $11 a. Stock price Liabilities and Shareholders' Equity Pocket wins a lawsuit and is paid $200,000 in cash. The market value of the equity rises by that amount, and Pocket deci a one-off payout of $3.00 per share. $0 1,100,000 $ 1,100,000 a. What will be Pocket's stock price after the payout if the payout comes as a cash dividend? b. What will be Pocket's stock price after the payout if the payout comes as a share repurchase? Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. per share

Hewlard Pocket's market value balance sheet is given. Assets A. Original balance sheet Cash Other assets Value of firm $ 150,000 950,000 Debt Equity $1,100,000 Value of firm Shares outstanding = 100,000 Price per share = $1,100,000/100,000 = $11 a. Stock price Liabilities and Shareholders' Equity Pocket wins a lawsuit and is paid $200,000 in cash. The market value of the equity rises by that amount, and Pocket deci a one-off payout of $3.00 per share. $0 1,100,000 $ 1,100,000 a. What will be Pocket's stock price after the payout if the payout comes as a cash dividend? b. What will be Pocket's stock price after the payout if the payout comes as a share repurchase? Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. per share

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...

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Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the balance sheet date, MJOs stock was selling for S25 per share. Required: Assuming MJOs dividend yield is 1%, what are the dividends per common share? Assuming MJOs dividend yield is 1% and its dividend payout is 20%, what is MJOs net income?
You have the following information about Trisha Company: total asset =P350,000; common stock equity = P175,000; Return on Equity (ROE) =12.5%. What is Trisha’s earnings available for common stockholders? A. P21,875B. P43,750C. P50,000D. P47,632
Hewlard Pocket's market value balance sheet is given. Assets Liabilities and Shareholders' Equity A. Original balance sheet Cash $ 150,000 Debt Other assets 950,000 Equity 1,100,000 Value of firm $1,100,000 Value of firm $1,100,000 Shares outstanding Price per share 100,000 $1,100,000 / 100,000 = $11 %D Pocket needs to hold on to $76,000 of cash for a future investment. Nevertheless, it decides to pay a cash dividend of $1.90 per share and to replace cash as needed with a new issue of shares. After the dividend is paid and the new stock is issued: a. What will be the price per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What will be the total value of the company? (Enter your answers in whole dollars, not in millions.) c. What will be the total value of the stock held by new investors? (Enter your answers in whole dollars, not in millions. Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) d.…
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