Exercise 11.5

Exercise 11.5 - F. Yes you can determine the fair market...

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Exercise 11.5 Jason Wilcox A. 150,000 shares (15,000,000/100=) B. $1,050,000 (150,000 x $7=) C. $16 (20,000,000+44,000,000/4,000,000) D. Legal Capital $35,000,000 (15,000,000+20,000,000) Total Capital $79,000,000 (Legal Capital 35,000,000+Additional Capital 44,000,000) E. $32.11 Total Stock Holders Equity $143,450,000 Less Claims on Preferred Stock $15,000,000 Equity of Common Stock holders $128,450,000 Number of Shares 4,000,000 Book Value per share ($128,450,000/4,000,000=32.1125=$32.11)
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Unformatted text preview: F. Yes you can determine the fair market value since you have all the information given to determine the book value per share. A fair market value is calculated by what it would go for on an open market and since the shares were originally $16 per share and now how a book value double that you can see that the value on an open market would be around $32 per share. Although those prices would depend day to day as to how the market is doing....
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