Reference no: EM131792617

Question - Consider the following 2010 balance sheet data for Funny Mae:

Assets

Cash 41000

Accounts Receivable 50000

Inventory: 175000

Factory, at cost 500000

Less accumulated depreciation 335000

Net fixed assets1 400000

Land 145000

Total assets 811000

Liabilities and stockholder's equity

Notes payable 142000

Accounts payable 80000

Very long-term mortgage bonds 275000

Preferred stock2 30000

Common stock3 150000

Capital surplus 75000

Retained earnings 59000

Total liabilities and stockholder's equity 811000

1. Pools of subprime mortgages that cannot be easily converted into cash are included here.

2. Preferred stocks are not convertible, pay 3% on notional (100 dollars), there are 300 preferred shares outstanding.

3. Common stocks have a notional of 10 dollars, there are 15000 common outstanding.

Required -

a) Based on the information given, calculate the firm's working capital.

b) In 2010, the company earned an after-tax net income of $20,000 and paid dividends to common stockholders of $15,900. What were the earnings and dividends per share?

c) Funny Mae has only issued common stock during its Initial Public Offering (IPO). What was the market price per share at the time of issuance?