Company X has 600 shares of common stock, booked as stock value of $24,000, and paid in capital of $420,000. In addition, the firm has 1800 shares of preferred stock, cumulative, with a par value of $75 and a 6% annual dividend. Company X carries long term debt of $421,000 at 5%. Company X had earnings this year of $150,000 and is taxed at 21%.
(1) (worth three points) How much will the preferred shareholders be paid this year if the board had passed the preferred dividend for the prior three years? (show your calculation)
(2) (worth three points) What is the par value of the common stock in dollars? (show your calculation)
(3) (worth three points) How much did the common stock initially sell for? (show your calculation)
(4) (worth three points) How much in total financing does Company X have, and in what percentage is each component of the financing? (show your calculation)
(5) (worth three points) What is Company X’s ROE? (show your calculation)
(6) (worth three points) What is Company X’s EPS? (show your calculation)
(7) (worth three points) Complete the following table with values for each.
EBIT
Interest
EBT
Tax
EAT
Preferred Dividend
EAC
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