Teacher gave a hypothetical question today one posted and i

Reference no: EM13598901

Teacher gave a Hypothetical question today (one posted) and I could not grasp how she got any of the answers.Wonderful Outboard Watercraft (WOW) Inc. wants to expand to Blanton, Florida and needs cash. Therefore WOW owners are considering offering 30,000 shares of 1% preferred stock of $100 par on the market Currently the existing stockholders hold 100,000 shares of $50 par common stock. You are (still) their Chief Financial Officer and they ask you to prepare a schedule of what dividends the common and the (new) preferred stockholders would get if WOW sells these proposed preferred shares. You have estimated Income for Yr 1, 2, and 3 and determined that the following amounts could be distributed as dividends:

Year 1: $ 50,000
Year 2: 90,000
Year 3: 130,000

1. Determine the dividends per share for preferred and common stock for each year.
2. Prepare a brief memo giving the arguments for and against offering this preferred stock. In the memo also briefly mention other methods of obtaining the cash.

Reference no: EM13598901

Questions Cloud

Wendy dobson is managing director of the wichita day care : wendy dobson is managing director of the wichita day care center. wichita is currently set up as a full-time child care

Assume that chapman company acquired abernethys common : assume that chapman company acquired abernethys common stock for 490000 in cash. as of january 1 2009 abernethys land

It has more than 150 years of accumulated experience within : telenor group is one of the oldest and fastest growing companies in telecom sector which spreads over different

Buff company purchased a building for 900000 cash on : buff company purchased a building for 900000 cash on october 1 2009. the estimated life is 20 years and the salvage

Teacher gave a hypothetical question today one posted and i : teacher gave a hypothetical question today one posted and i could not grasp how she got any of the answers.wonderful

On january 1 2008 newco issued 800000 of 5 5-year bonds at : on january 1 2008 newco issued 800000 of 5 5-year bonds at 93. interest is paid annually on december 31st and the

On dec3108 xz had 600000 shares of common stock and 300000 : on dec31.08 xz had 600.000 shares of common stock and 300.000 shares of 8 noncumulative nonconvertible preferred stock

Xz concludet its first year of operations in which it made : xz concludet its first year of operations in which it made sales of 800.000 all in installment.collections during the

The fair value of the expected number of shares to be : lauren corporation acquired sarah inc. on january 1 2009 by issuing 13000 shares of common stock with a 10 per share

User Account

All Pages