The Sweet Shoppe and Candy Land are all-equity firms. The Sweet Shoppe has 500
shares outstanding at a market price of $96 a share. Candy Land has 2,500 shares
outstanding at a price of $24 a share. The Sweet Shoppe is acquiring Candy Land for
$62,000 in cash. The incremental value of the acquisition is $3,600. What is the net
present value of acquiring Candy Land to The Sweet Shoppe?
Hungry Howie's is currently operating at full capacity. The profit margin and the
dividend payout ratio are held constant. Net working capital and fixed assets vary
directly with sales. Sales are projected to increase by 11 percent. What is the external
Mario's has 18,000 shares of stock outstanding with a par value of $1 per share and a
market price of $4 a share. The balance sheet shows $18,000 in the common stock
account, $336,000 in the paid in surplus account, and $64,000 in the retained earnings
account. The firm just announced a 5-for-1 stock split. What will the paid in surplus
account value be after the split?