03 22 4 a. b. Explain Explain the effect of a huge cash dividend payment. ROE Refer to the financial statement and ratio information for Microsoft on page 119 to answer the following questions Q1 C. e. Study the Statement of Stockholders' Equity for the five years presented. a. b. 3 d. was a resu During fiscal year ended (FYE) 6/30/2003 stockholders' equity increased primarily a of (net income/issuing common stock/repurchasing common stock/paying dividends) as a result of During FYE 6/30/2004 stockholders' equity (increased / decreased) primarily (net income/ issuing common stock/repurchasing common stock/paying dividends). During FYE 6/30/2005 stockholders' equity (increased / decreased) primarily as a result of (net income/Issuing common stock/repurchasing common stock/paying dividends). During FYE 6/30/2006 stockholders' equity (increased / decreased) primarily as a result of (net income/ issuing common stock/repurchasing common stock/paying dividends). During FYE 6/30/2007 stockholders' equity (increased / decreased) primarily as a result of (net income / issuing common stock/repurchasing common stock/paying dividends). Study the Balance Sheet for the five years presented. b. During FYE 6/30/2005 cash equivalents (increased / decreased) significantly as a result of (a net loss / repurchasing common stock/paying dividends). During FYE 6/30/2006 cash equivalents (increased decreased) primarily as a result of (a net loss / repurchasing common stock/paying dividends). From 6/30/2004 to 6/30/2007 total liabilities (increased / decreased) whereas stockholders' equity (Increased / decreased), resulting in a(n) (increasing / decreasing) debt ratio and (increasing/decreasing) financial leverage. Study the Income Statement for the five years presented. From 6/30/2003 to 6/30/2007 revenues (increased/decreased), net income (increased / decreased), and EPS (increased / decreased). During FYE (6-30-2004 / 6-30-2005/6-30-2006) Microsoft paid a huge special one-time $3 per share dividend totaling $ billion. To pay this dividend, did Microsoft have enough cash? (Yes/No) Enough retained earnings? (Yes/No) At this time Bill Gates owned 1.12 billion shares of Microsoft stock so his dividend was (1.122.243.36) billion dollars. What did Bill Gates do with his dividend? (Buy a super-duper sports car / Donate it to charity / Give it to his children)