annuity PV interest 41 e company could issue 400,000 additional shares of $1 par

Question

annuity PV interest 41 e company could issue 400,000 additional shares of $1 par value common stock for $4 per share The company will begin paying a dividend to ALL the common shareholders of $0.12 per share and this Th 42 will continue into the future. 43 Cash Received Annual Cash Required 45 46 number of existing shares number of new shares total shares at year end market price Dividend rate Dividend period PIC year end PIC > par year end 49 51 52 53 54 56 pctb Asset aquisitions planned dep'n financing options worksheet depreciat READY RECOVERED

Explanation / Answer

Cash received = 400000*$4=$1600000 Annual cash required = 400000*0.12=$48000 Number of existing shares 0 Number of new shares 400000 total shares at year end 400000 Market price 0 Dividend rate $0.12 per share Dividend period 1 year Paid in capital year end 400000*$3=$1200000

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