Question: please show calculations (no excel) Evergreen Inc's most recent Statement of Financial Position is given below. Evergreen Inc. Statement of Financial Position As at Dec
Evergreen Inc's most recent Statement of Financial Position is given below. Evergreen Inc. Statement of Financial Position As at Dec 31, 2021 $ Assets Cash $ 425,000 Accounts Receivable $ 400,000 Inventories $ 500.000 Total Current Assets $ 1,325,000 Net Fixed Assets $18.000.000 Liabilities Accounts Payable Other Current Liabilities Total Current Liabilities $ $ 300,000 425.000 725,000 LT Debt Common Stock (85,000 shares o/s) Retained Earnings $ $ $ 2,500,000 4,500,000 11.600.000 M $ Total Liabilities & Total Assets $ 19,325,000 Owners Equity 19,325,000 Additional Information: Current market price per common share = $ 195 Before tax cost of borrowing (secured loan) = 5% Weighted Average Cost of Capital =12% Net Income for 2021 = $925,000 Target D/E ratio based on market values= 0.25 Corporate tax rate = 35% Note: Parts a, b, c, d, e, and f are all independent of one another a) Show the change in the Owner's Equity section of the balance sheet if Evergreen declares a 15% stock dividend. What will be the new market price share? (6 marks) b) Suppose instead of the stock dividend, Evergreen declares a 5 for 2 stock split. Show the change in the Owner's Equity section of the balance sheet and the new stock price.(3 marks) c) Suppose instead, Evergreen uses a residual dividend policy. Their capital budget for the upcoming year = $1,600,000. Calculate the debt, external equity financing required and the dividends per share. (16 Marks)
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