Based on this information alone, can you determine whether White can pay a $2,000 cash dividend? Why or why not?

The December 31 , 2016, balance sheet for Deen Company showed total stockholders' equity of$156,000. Total stockholders' equity increased by $65,000 between December 31, 2016, and December 31, 2017. During 2017 Deen Company acquired$20,000 cash from the issue of common stock. Deen Company paid a $5,000 cash dividend to the stockholders during 2017.

Required

Determine the amount of net income or loss Deen reported on its 2017 income statement.

Rubenstein Bros. Clothing is expecting to pay an annual dividend per share of $\$ 0.75$ out of annual earnings per share of $\$ 2.25$. Currently, Rubenstein Bros.' stock is selling for $\$ 12.50$ per share. Adhering to the company's target capital structure, the firm has $\$ 10$ million in total invested capital, of which $40 \%$ is funded by debt. Assume that the firm's book value of equity equals its market value. In past years, the firm has earned a return on equity (ROE) of $18 \%$, which is expected to continue this year and into the foreseeable future.

What is the stock's required return?

Selected balance sheet and income statement information from Siemens, AG, for 2015 through 2017 follows(Euro in millions).

Compute times interest earned and the debt-to-equity ratio for each year and discuss any trends for each.

______ is the total combined customer lifetime values of all the company's current and potential customers.

a. Customer-perceived value
b. Value proposition
c. Market share
d. Share of customer
e. Customer equity

In early $2012$, General Electric (GE) had a book value of equity of $\$ 109$ billion, $10.3$ billion shares outstanding, and a market price of $\$ 9.66$ per share. GE also had cash of $\$ 40$ billion, and total debt of $\$ 530$ billion. Three years later, in early $2015$, GE had a book value of equity of $\$ 112$ billion, $10.9$ billion shares outstanding with a market price of $\$ 16.59$ per share, cash of $\$ 85$ billion, and total debt of $\$ 417$ billion. Over this period, what was the change in GE's

a. market capitalization?

b. market-to-book ratio?

c. enterprise value?

The following financial statement data is from five separate companies:

Required
1. Answer the following questions about Company A:
a. What is the amount of equity on December 31, 2010?
b. What is the amount of equity on December 31, 2011?
c. What is the amount of liabilities on December 31, 2011?
2. Answer the following questions about Company B:
a. What is the amount of equity on December 31, 2010?
b. What is the amount of equity on December 31, 2011?
c. What is net income for year 2011?
3. Calculate the amount of assets for Company C on December 31, 2011.
4. Calculate the amount of owner investments for Company D during year 2011.
5. Calculate the amount of liabilities for Company E on December 31, 2010.

When calculating the weighted average cost of capital, the costs of which of the following types of capital include a ($1 - T$) multiplier, where $T$ is the effective tax rate?

a. Debt capital

b. Equity capital

c. Both (a) and (b)

d. Neither (a) nor (b)

The following financial statement information is from five separate companies:

Required

1. Answer the following questions about Company A:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is the amount of liabilities on December 31, 2015?
2. Answer the following questions about Company B:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is net income for year 2015?
3. Calculate the amount of assets for Company C on December 31, 2015.
4. Calculate the amount of owner investments for Company D during year 2015.
5. Calculate the amount of liabilities for Company E on December 31, 2014.

Icarus Airlines is proposing to go public, and you have been given the task of estimating the value of its equity. Management plans to maintain debt at 30% of the company's present value, and you believe that at this capital structure the company's debtholders will demand a return of 6% and stockholders will require 11%. The company is forecasting that next year's operating cash flow (depreciation plus profit after tax at 40%) will be $68 million and that investment expenditures will be$30 million. Thereafter, operating cash flows and investment expenditures are forecast to grow by 4% a year. a. What is the total value of Icarus? b. What is the value of the company's equity?

Stock split versus stock dividend: Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $\$ 120$ per share. The most recent period's earnings available for common stock are included in retained earnings.

b. What change in stock price would you expect to result from the stock split?

The stockholders’ equity section of Leyland Corporation’s balance sheet at December 31 is presented here.

$$\begin{array}{c} \textbf{LEYLAND CORPORATION}\\ \textbf{Balance Sheet (partial)}\\ \end{array}$$

$$\begin{array}{lrr} \text{Stockholders’ equity}\\ \qquad\text{Paid-in capital}\\ \qquad\qquad\text{Preferred stock, cumulative, 10,000 shares authorized,}\\ \qquad\qquad\qquad\text{6,000 shares issued and outstanding}&\text{\$\hspace{7pt}600,000}\\ \qquad\qquad\text{Common stock, no par, 750,000 shares authorized,}\\ \qquad\qquad\qquad\text{580,000 shares issued}&\underline{\text{\hspace{6pt}2,900,000}}\\ \qquad\qquad\qquad\text{Total paid-in capital}&\text{\hspace{1pt}3,500,000}\\ \qquad\text{Retained earnings}&\underline{\text{\hspace{6pt}1,158,000}}\\ \qquad\text{Total paid-in capital and retained earnings}&\text{\hspace{1pt}4,658,000}\\ \qquad\text{Less: Treasury stock (6,000 common shares)}&\underline{\text{\hspace{19pt}32,000}}\\ \text{Total stockholders’ equity}&\underline{\underline{\text{\$\hspace{1pt}4,626,000}}}\\ \end{array}$$

Instructions

From a review of the stockholders’ equity section, answer the following questions.

(a) How many shares of common stock are outstanding?

The firms HL and LL are identical except for their debt-to-total-assets ratios and interest rates on debt. Each has $20 million in assets, earned $4 million before interest and taxes, and has a 40 percent marginal tax rate. Firm HL, however, has a debt-to-total-assets ratio (D/TA) of 50 percent and pays 12 percent interest on its debt, whereas LL has a 30 percent debt-to-total-assets ratio and pays only 10 percent interest on debt.

Calculate the rate of return on equity (net income/equity) for each firm.

Lurvey-Priest, Inc., was organized in 2011. At December 31, 2011, the Lurvey-Priest balance sheet reported the following stockholders’ equity:

$$\begin{array}{lr} \textbf{LURVEY-PRIEST, INC.}\\ \textbf{Stockholders’ Equity}\\ \textbf{December 31, 2011}\\ \hline \text{Paid-in Capital:}&\\ \quad\text{Paid-in Capital: Preferred stock, 4\\\%, \$55 par, 140,000 shares authorized, none issued}&\$ 0\\ \quad\text{Common stock, \$2 par, 540,000 shares authorized, 62,000 shares issued and outstanding}&124,000\\ \quad\text{Paid in capital in excess of par—common}&42,000\\ \quad\quad\text{Total paid-in capital}&166,000\\ \text{Retained earnings}&28,000\\ \text{Total stockholders’ equity}&\$ 194,000\\ \end{array}$$

Requirements

1. During 2012, the company completed the following selected transactions. Journalize each transaction. Explanations are not required. a. Issued for cash 1,500 shares of preferred stock at par value. b. Issued for cash 2,000 shares of common stock at a price of $7 per share. c. Net income for the year was$78,000, and the company declared no dividends. Make the closing entry for net income.
2. Prepare the stockholders’ equity section of the Lurvey-Priest balance sheet at December 31, 2012.

The current asset section of the Excalibur Tire Company's balance sheet consists of cash, marketable securities, accounts receivable, and inventories. The December 31,2018 , balance sheet revealed the following:

$$\begin{array}{lr}\text { Inventories } & \$ 840,000 \\ \text { Total assets } & \$ 2,800,000 \\ \text { Current ratio } & 2.25 \\ \text { Acid-tetst ratio } & 1.2 \\ \text { Debt to equity ratio } & 1.8\end{array}$$

Required: Determine the following 2018 balance sheet items:

1. Current assets
2. Shareholders' equity
3. Long-term assets
4. Long-term liabilities