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## Finance

 Basic Finance Corporate Finance Financial Management Financial Econometrics Portfolio Management Risk Management Public Finance Business Law & Ethics

problem 1: Company X is presumably doing well. The corporation's balance sheet last September 31 can be summarized as follows:

Total Assets       \$6,000,000
Total Liabilities    \$2,000,000

Stockholder's equity:
Common stock:                          1,500,000 shares
of \$1.00 par value shares issued
andoutstanding                          \$1,500,000

Retained Earnings                           \$3,000,000

Total Stockholders' equity                \$4,500,000
Total Liabilities & Stockholders'
Equity                                          \$6,500,000

Net Income last year was \$.5 million. The common stock is currently selling for \$11.00 per share.

Compute the following and show the formula:

• Book value of the corporation.
• Book value per share.
• Value of the corporation if earnings are capitalized at 200.
• Capitalized value per share.
• Market value of the entire corporation.

problem 2: When Lydia started her vending machine business, she instituted flexible budgeting for the first few months of operations. Her first monthly budget numbers were these:

Cost of goods sold             200 of sales
Salaries                           \$4,000
Delivery expense               2% of sales
Rent                               \$1,000
Insurance                        \$200
Supplies                          5% of sales
Telephone                        \$150

Compute and list the budget figures for September, when sales were \$50,000.

Basic Finance, Finance

• Category:- Basic Finance
• Reference No.:- M91371

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