Chapter 18 Equity

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Chapter 18 Equity Powered By Docstoc
					 Chapter 18
Input boxes in tan
Output boxes in yellow
Given data in blue
Calculations in red
Answers in green

NOTE: Some functions used in these spreadsheets may require that
the "Analysis ToolPak" or "Solver Add-in" be installed in Excel.
To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak"
and "Solver Add-In."
sis ToolPak"
   Chapter 18
   Question 2

   Input Area:


   Common stock
   Par value
   Capital surplus
   Retained earnings
   Total owners'Equity

a. Stock price
   Stock dividend

b. Stock dividend


   Output Area:


a. New shares outstanding              #DIV/0!
   New shares issued                   #DIV/0!
   Capital surplus on new shares       #DIV/0!

   Common stock                        #DIV/0!
   Capital surplus                     #DIV/0!
   Retained earnings                   #DIV/0!
                                   $             -

b. New shares outstanding              #DIV/0!
   New shares issued                   #DIV/0!
   Capital surplus on new shares       #DIV/0!

   Common stock                        #DIV/0!
   Capital surplus                     #DIV/0!
   Retained earnings                   #DIV/0!
                                   $                 -
        Chapter 18
        Question 4

        Input Area:


        Shares outstanding
        Stock price
a.      Stock split                              for   3
b.      Stock dividend percent
c.      Stock dividend percent
d.      Stock split (shares)                     for   7


        Output Area:


a.      Stock split                #DIV/0!
b.      Stock dividend           $       -
c.      Stock dividend           $       -
d.      Stock split                #DIV/0!

e. a.   New shares outstanding               -
   b.   New shares outstanding               -
   c.   New shares outstanding               -
   d.   New shares outstanding               -
Chapter 18
Question 6

Input Area:


Repurchase
Shares outstanding
Dividend per share

                  Market Value Balance Sheet
Cash                                     Equity
Fixed assets
Total                                      Total


Output Area:


Repurchasing the shares will reduce
shareholders' equity by                                    $        -
Shares bought                                                 #DIV/0!
New shares outstanding                                        #DIV/0!
Price after repurchase                                        #DIV/0!
The repurchase is effectively the same as the cash dividend because
you either hold a share worth                 #DIV/0!
or a share worth             #DIV/0! and $          -     in cash.
Therefore you participate in the repurchase according to the
dividend payout percentage; you are unaffected.
Chapter 18
Question 10

Input Area:


Debt-equity ratio
Earnings
Dividend


Output Area:


Equity portion of outlays $   -

New borrowings           $    -

Total capital outlays    $    -
   Chapter 18
   Question 14

   Input Area:


   Discount rate
   Shares outstanding
   Stock price
   Dividend in one year
c. Initial investment amount
   Net income earned


   Output Area:


a. Stock price                 $               -

b. Stock price                 $           -

c. Shares to sell                  #DIV/0!

d. The MM model is not realistic since it does
   not account for taxes, brokerage fees,
   uncertainty over future cash flows, investors'
   preferences, signaling effects, and agency
   costs.

				
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