Calculate the book value of equity

Assignment Help Finance Basics

Reference no: EM131954972

Question: Cavalier Corp's articles of incorporation authorize the firm to issue 500,000 shares of $5 par value common stock, of which 325,000 shares have been issued. Those shares were sold at an average 12% over par. In the quarter that ended last week, Cavalier earned $260,000 net income; 4 percent of that income was paid as a dividend. Prior to the close of the books, Cavalier has $3, 545,000 in retained earnings. The company owns no treasury stock.

a. Calculate the book value of equity.

b. Now the company sells 25,000 newly issued shares at a price of $4 per share. Par value of the shares is $5. What will be the book value of equity after the issue?

Reference no: EM131954972

Questions Cloud

What qualities or traits do you believe made person famous : What did this person do for a living? What qualities or traits do you believe made this person famous? What did this person do to become famous?

Define the variable names and categories : Apply techniques of data manipulation to prepare analysis data to answer your research question. Define the variable names and categories

Identify a disruptive innovation in healthcare : Identify a disruptive innovation in healthcare (i.e. one that completely changed the market). Why was it revolutionary? How did it change healthcare?

What percent did aftertax income increase as result : In part a, by what percent did aftertax income increase as a result of a 10 percent increase in the sales price?

Calculate the book value of equity : Cavalier Corp's articles of incorporation authorize the firm to issue 500,000 shares of $5 par value common stock, of which 325,000 shares have been issued.

Source evaluation and effectiveness : Share a resource you intend to use in your informative speech.

Create a questionnaire using these measurement scales : Can someone explain how to create a questionnaire using these measurement scales? Can you provide an example of a question for each?

Explore interpersonal and family conflicts : Write 4-6 paragraphs in which you explore interpersonal and/or family conflicts, as described within one or more of the stories and/or poems for Lesson 8.

Think of a recent change that happened in organization : Think of a recent change that happened in your organization. Try to focus on a large change such as a form.

User Account

All Pages