Finance

5. A company had outstanding 80,000 shares of $10 par value common stock. During the

July 1 McGrath Company 12% bonds, par $50,000, dated March 1, 2010 purchased at 104 plus accrued interest, interest payable annually on March 1, due March 1, 2030 54,000

• The shareholders are willing to sell back their shares at a price of $36.92

Stock and Dividends: Describe all the stock included in the Stockholders Equity section of the Balance Sheet. Include types of stock, par value and the number of shares authorized, issued and outstanding. Based on the information in the 10K, when did the company pay its last dividend and what was the amount of the

d. A preferred stock paying a 7.2% dividend on a $93 par value. If a new issue is offered, the shares would sell for $85.32 per share.

Coupon rate. The dollar coupon is the "rent" on the money borrowed, which is generally the par value of the

. . . . $ 4,400,000 150,000 950,000 5,500,000 Long-terrn liabilities Bonds payable, 10.625% .

Earnings per share is introduced by the Financial Accounting Standards Board as the functionality used to calculate an institutions’ earnings for the year-end financial statements. The institutions can be made of up a simple or complex capital structure. It must be calculated on a constant basis in order for reports to remain consistent. FASB provides a formula of “dividing income available to common stockholders by the weighted average number of common shares outstanding during the period” (FASB 2009), to measure each share of stock earned. The net income of an institution simply comes from their income statement. The weighted average of common shares outstanding references on average how much was stock was outstanding during the entire year, since it fluctuated throughout the year. An issue that can be faced when determining earnings per share is the concept of share buybacks. This concept discusses cash that is not actually being invested but gives off the impression of good performance, when in all actuality, nothing had been generated. Investors and creditors focus a lot of attention to the findings of earnings per share as it sparks monetary interests. Ultimately, institutions strive for higher rates of earnings per share to demonstrate the institution’s performance and the likelihood of future success.

* The performance of the industry or sector that the company is in. The stocks of companies operating within the same industry tend

the bond and the market rates. The benefits of bond holding are the interest which can help counteract the

— Earnings per Share = Net Income – Preferred Dividends / Average Common Shares Outstanding

A bond 's price fluctuates throughout its life in response to a number of variables. When a bond trades at a price above the face value, it is said to be selling at a premium. When a bond sells below face value, it is said to be selling at a discount. The coupon is the amount the bondholder will receive as interest payments. It 's called a "coupon" because sometimes there are physical coupons on the bond that you tear off and redeem for interest. However, this was more common in the past. Nowadays, records are more likely to be kept electronically. The maturity date is the date in the future on which the investor 's principal will be repaid. Maturities can

As we begin looking at how you value bonds, you might want to have your financial calculator out so you can practice some of the calculations that I am making in these slides. You might want to pause and see if you can replicate those calculations as we go along. We can use a timeline to lay out the features of bonds, you probably won’t need to do this as solve bond problems, but it might be helpful to look at one as we start out.

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 13,517,672 Class A ordinary shares, par value US$0.001 per share, and 419,204,400 Class B ordinary shares, par value US$0.001 per share as of December 31, 2015.

15. “…Income available to common shareholders is defined as net income (or income from continuing operations) minus preferred dividends paid or declared and any current year preferred dividends on cumulative preferred stock not declared or paid. Companies that have a discontinued operation, extraordinary item, or cumulative effect of a change in accounting principle are to use income from continuing operations as the ‘control number’ in determining whether potential common shares are dilutive or antidilutive.” In the new standards, weighted average number of shares is the same as in the Opinion No. 15, with consideration of all stock sales, treasury stock transactions, securities exercised or converted during the period, and stock splits and stock dividends, retroactively applied. If the entity only has common stock outstanding and no other securities that can result in the issuance of common shares, it will have a simple capital structure and only need to report basic per share amounts during the period. In SFAS No. 128, primary earnings per share is eliminated and, as a result, those tests for common stock equivalency are eliminated too which are the "five-year test" and "three-month rule" for options and warrants, and the "five-year test" and "effective-yield test" for convertible securities. The "three-percent rule or method" which determines when primary or fully diluted earnings