The balance sheet for Tempest, Ic., Is shown here in market value terms. There are25,000 shares of stock outstanding.Market Value Balance Sheet$ 175,000570,000CashFixed assetsEquity$745,000Total$745,000Total$745,000The compay has announced It is going to repurchase $22,500 worth of stock Instead ofpaying a dividend of $.90.a. What effect will this transaction have on the equity of the firm? (Input the answer aspositive value. Do not round Intermedlate calculations and round your answer tothe nearest whole number, e.g., 32.)b. How many shares will be outstanding after the repurchase? (Do not roundIntermedlate calculatlons and round your answer to the nearest wholenumber, e.g., 32.)c. What will the price per share be after the repurchase? (Do not round Intermedlatecalculatlons and round your answer to 2 decimal places, e.g., 32.16.)a. The transaction willshareholders' equity byb. New shares outstandingC.Share price

Number of shares outstanding = 25,000 Equity = 745,000 Cash = 175,000 Fixed Assets = 570,000…

The balance sheet for Tempest, Inc., Is shown here in market value terms. There are 25,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 175,000 570,000 Equity Fixed assets $745,000 Total $745,000 Total $745,000 The compay has announced It is golng to repurchase $22,500 worth of stock Instead of paying a dividend of $.90. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) b. How many shares wll be outstanding after the repurchase? (Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) c. What will the price per share be after the repurchase? (Do not round Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) a. The transaction will b. New shares outstanding c. Share price |shareholders' equity by

The balance sheet for Tempest, Inc., Is shown here in market value terms. There are 25,000 shares of stock outstanding. Market Value Balance Sheet Cash $ 175,000 570,000 Equity Fixed assets $745,000 Total $745,000 Total $745,000 The compay has announced It is golng to repurchase $22,500 worth of stock Instead of paying a dividend of $.90. a. What effect will this transaction have on the equity of the firm? (Input the answer as positive value. Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) b. How many shares wll be outstanding after the repurchase? (Do not round Intermedlate calculatlons and round your answer to the nearest whole number, e.g., 32.) c. What will the price per share be after the repurchase? (Do not round Intermedlate calculatlons and round your answer to 2 decimal places, e.g., 32.16.) a. The transaction will b. New shares outstanding c. Share price |shareholders' equity by

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 5MCQ

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The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $.50 per share, and there are 20,000 shares of stock outstanding. The market-value balance sheet for Payout is shown in the following table. Liabilities & Equity Assets $100,000 Cash Fixed $1,000,000 $1,000,000 assets 900,000 Equity Total $1,000,000 Total Required: (a.) (b.) (c.) What price is Payout stock selling for today? What price will it sell for tomorrow? Ignore taxes. Suppose that instead of paying a dividend, Payout Corp. announces that it will repurchase stock with a market value of $10,000. What happens to the stock price when the repurchase proposal is announced? Suppose that the stock is repurchased immediately after the announcement. What would be the stock price after the repurchase? (d.)
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CBA Inc. has 400,000 shares outstanding with a $5 par value. The shares were issued for $12. The stock is currently selling for $34. CBA has $5.000.000 in retained earnings and has declared a stock dividend that will increase the number of outstanding shares by 6%. What will be the "capital in excess of par account after the stock dividend? Mumple Choice O O $7.685.000 $2.685.000 $3,496,000 $2.385,000
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