TLTK_Chương 9: Payout Policy

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EX1: A firm has 100 outstanding common stocks selling at $60 per share and declares a 20% stock dividend. After paying stock dividend:

a)How many common stocks will be outstanding?

b)What will be the new price of stock?

EX2: The balance sheet of company A shows $100,000 in the common stock account. Know a share of stock has par value of $1 and market price of $60. The firm just announced a 3-for-2 stock split.

How many common stocks will be outstanding after the split? What will the market price per share be after the split?

EX3: Corporate B has 30,000 shares of stock outstanding with a par value of $10 per share and a market price of $45 a share. The balance sheet shows $300,000 in the common stock account, $550,000 in the capital in excess of par value account, and $732,000 in the retained earnings account. The corporate will have a 5-for-3 stock split. What will the market price per share be after the split?

EX4: Corporate C has excess cash of 24 mil VND and other assets of 120 mil VND. Equity is worth 60 mil VND. The firm has 500 shares of stock outstanding and net income of 120 mil VND. The firm has decided to spend all of its excess cash on a share repurchase program.

How many shares of stock will be outstanding after the stock repurchase is completed? Knowing that corporate C has a market value equal to its book value.

EX5: Corporate C has excess cash of $262.5 and other assets of $935. Equity is worth $1,400. The firm has 800 shares of stock outstanding and net income of $120. The firm has decided to spend all of its excess cash on a share repurchase program.

How many shares of stock will be outstanding after the stock repurchase is completed? Knowing that corporate C has a market value equal to its book value.