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15 December, 11:34

1) Common Equity (C/E) = $5 million, Shares outstanding are 450,000, market price of stock is $16.62 What is the difference between Book Value and Market price of stock? 2) Last year C/E ended at = $2,000,000 and shares outstanding are 300,000, This year NI=$400,000 Div=$300,000 What is Book Value of shares at the end of this year? What was BV at end of last year? 3) Current Assets = $5000. Current Liabilities=$2000 (Accts Payable $1200, Accrued wages $500 Notes payable $300). What is NOWC? 4) Sales are $20 mill, Operating costs are $12mill (other than depreciation which equals $3mill), $9million in 10% bonds outstanding, tax rate 40% What is EBIT

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  1. 15 December, 13:15
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    The difference between book value and market value is for 2,479,000 dollars

    per share the difference is for 5.5 dollars

    b) book value per share 7

    c) new working capital: 2,000

    d = EBIT 8,000,000

    Explanation:

    450,000 x 16.62 - 5,000,000 = 2,479,000

    in share price:

    16.62 - 5,000,000/450,000 = 5.5

    2,000,000 + 400,000 - 300,000 = 2,100,000

    2,100,00 / 300,000 = 7

    c) net working capital

    current assetis - current liab

    5,000 - 3000 = 2,000

    sales 20,000,000

    operating cost 12,000,000

    earnings before interest and taxes 8,000,000
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