Assets Liabilities and Shareholders' Equity A. Original balance sheet Cash $ 150,000 Debt $ 0 Other assets
Question:
Assets Liabilities and Shareholders' Equity
A. Original balance sheet
Cash $ 150,000 Debt $ 0
Other assets 950,000 Equity 1,100,000
Value of firm $ 1,100,000Value of firm $ 1,100,000
Shares outstanding = 100,000
Price per share = $1,100,000 / 100,000 = $11
Pocket wins a lawsuit and is paid $230,000 in cash. The market value of the equity rises by that amount, and Pocket decides to pay out $1.90 per share.
a.What will be Pocket's stock price if the payout comes as a cash dividend?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
b.What will be Pocket's stock price if the payout comes as a share repurchase?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta