Question

1.The balance sheet for Imagine Corp. is shown here in market value terms. There are 4,000 shares of stock

outstanding.

Market Value Balance Sheet 

Cash $26,000 Equity $171,000 

Fixed assets 145,000

Total $171,000 Total $171,000 

Topic: Repurchase of Stock

The company has declared a dividend of $2.38 per share. The stock will go ex-dividend tomorrow. Ignore taxes.

Instead of a dividend, the company has announced it is going to repurchase $3,900 worth of stock.

How many shares will be outstanding after the repurchase? Answer is 3909

What will be the share price after the repurchase?Answer is 42.75

2.The market value balance sheet for Bigham Manufacturing is shown here. 

Market Value Balance Sheet

Cash $143,000  Debt $124,000 

Fixed assets 597,000  Equity 616,000 

Total $740,000   Total $740,000 

Bigham has declared a 35% stock dividend. The stock goes ex dividend tomorrow (the chronology for a stock dividend is similar to that for a cash dividend). There are currently 40334 shares outstanding.

What is the stock price today? Answer 15.27

Please show all work for both example so I can figure out where I went wrong.

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