Atlantic Coast Resources Company had the following balance sheet at the end of 2014: Atlantic Coast Resources
Question:
Atlantic Coast Resources Company had the following balance sheet at the end of 2014:
Atlantic Coast Resources is concerned about its book value per share, which is computed by dividing the total equity on the balance sheet by the number of outstanding shares of stock.
a. What is the book value per share of Atlantic’s common stock?
b. Suppose the firm sold the remaining authorized shares and netted $32.55 per share from the sale. What would be the new book value per share?
Atlantic Coast Resources Company: Balance Sheet December 31, 2014 Accounts payable Notes payable Long-term debt Common stock (30,000 authorized, 20,000 shares outstanding) Retained earnings Total liabilities and equity 64,400 71,400 151,200 364,000 336,000 $987,000 Total assets $987,000
Step by Step Answer:
a Book value per share 364000 33600020000 35...View the full answer
Related Video
Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.
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