Meman Ten years ago, Sunland Ltd. issued 598,500 shares, which are still outstanding, for a total value of $4.55 million. The board of directorsfor Sunland Ltd. has become concerned with the dramatic drop in the market price of the shares to $0.40 per share. The company is atrisk of being delisted if the share price drops below $0.35 per share.(a)Your answer is correct.What would be the required reverse stock split to move the market price to $7.60 per share?Required reverse stock split1for19

Lets understand the basics.Reverse stock split is a consolidation of the already outstanding shares…

Answered: Ten years ago, Sunland Ltd. issued…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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MyTel Corp, an Internet service provider, has prospered during the past seven years, and recently the company's share price has shot up to $248.00. MyTel's management wishes to decrease the share price to the range of $106.00 to $129.00, which will be attractive to more investors. Should the company issue a 100 percent stock dividend or split the stock? Why? If you propose a stock spilt, state the split ratio that will accomplish the company's objective. Show your computations. COD The company has two options: to split the stock or to issue a 100% stock dividend. If it uses a 2-for-1 stock split ratio, then both options will decrease the company's stock price to $
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Willis & Company has 20 million shares of $1 par value common stock outstanding. The company believes that its current market price of $100 per share is too high and decides to execute a 4-for-1 forward stock split to lower the price. How many shares will be outstanding following the stock split?
Levy Corp. is an unlevered firm worth $507,000 (market value). There are 14,000 shares of stock outstanding. The company just announced that, to change the capital structure, it will repurchase $22,400 worth of stock with borrowed fund in six months. The tax rate for the firm is 20%. If the stock market is efficient, which of the following is correct according to MM propositions? The stock price should not react to the repurchase because the repurchase has no impact on firm value. The stock price will not react to the repurchase upon the repurchase is announced. The stock price can react to the repurchase any time between announcement and implementation. The stock price will not react to the repurchase upon the repurchase is complete.
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Jackson & Company has no-par value common stock outstanding that is selling at $20 per share. The company's CEO believes that the stock price is undervalued and decides to buy back 10,000 shares. What is the financial statement effect of the purchase of the treasury stock? Balance Sheet Income Statement Assets Liabilities Equity Revenues Expenses = Net Income +
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You may attempt this question 2 more times for credit. Santos Unlimited (SU) was originally unlevered with 4600 shares outstanding. However, after a major financial restructure, SU now has $35000 of debt, with an annual interest expense of 11 percent. The restructuring has reduced the number of shares to 3700. A group of shareholders of SU are not convinced that this move towards adopting financial leverage is a good idea. Their main argument is that there is now some range of EBIT, however low, that will make the shareholders worse off than before. Help understand the situation better by computing the level of earnings before interest and tax (EBIT) that would make shareholders indifferent between being unlevered (i.e. not having any debt) and levered (i.e. having debt). Assume a 31 percent corporate tax rate. Answer: $ Place your answer to the nearest dollar without a dollar sign or a comma (if applicable).
Willis & Company has 20 million shares of $1 par value common stock outstanding. The company believes that its current market price of $100 per share is too high and decides to execute a 4-for-1 forward stock split to lower the price. There are 80 million outstanding shares following the stock split What will be the new par value per share?
8) Annalists of UBS Group (offers both wealth management and asset management services) believe the price for shares of TopBuild Corp. will go down in the near future. It was decided to sell short 10,000 shares of TopBuild Corp. at the current market price of USD 257 per share. The initial margin requirement is 60 percent. Which of the following statement is the most accurate regarding the proceeds from the short sale and the margin requirement that UBS Group is subject to on this short sale? Select one: He will need to leave the proceeds from the short sale USD 2,570,000 and contribute USD 1,542,000 as margin. He will only need to contribute USD 1,542,000 as margin. He will need to leave the proceeds from the short sale USD 2,570,000 and contribute USD 1,028,000 as margin. He will only need to contribute USD 1,028,000 as margin. He will only need to leave the proceeds from the short sale (USD 2,570,000) as deposit and does not need to contribute any…

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