B stockdividendse 149500a commonstockse 149500

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: any additional shares, the total number of shares outstanding could not exceed 279,999 [(140,000 shares 2) – 1 share]. Since 260,000 shares are currently held by non­board investors, and the non­board members can control a total of only 139,999 shares (279,999 shares – 140,000 shares held by board members), the company would have to repurchase 120,001 shares of the company's stock. b. The company will need to pay $50 per share for 120,001 shares [from part (a)]. Consequently, the company will need at least $6,000,050 in cash. Edmonds currently has insufficient cash to repurchase all 120,001 shares. If the board wants to block Vadar's takeover attempt by repurchasing some of its common stock, the company will have to borrow additional cash. c. Assets Cash Other current assets Noncurrent assets Liabilities and Stockholders' Equity $ 1,149,950* 5,250,000 4,200,000 8,000,000 8,220,000 6,320,000 Liabilities $ Common stock Retained earnings Less: Treasury stock (6,000,050) Total assets $ $ 13,569,950 13,569,950 Total liabilities and s...
View Full Document

Ask a homework question - tutors are online