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Eisenhower Company: monetary value and value of dollar

See attached file.

1. Assume that the U.S. monetary value of a dollar is 100% (e.g., $1.00=$1.00), in 1956. The Eisenhower Company is worth is $5,000,000.00. Compare the monetary value of the dollar of .75 (e.g., $1.00=$.75), in 2005 to the 1956 monetary value:

a. What is the worth of the Eisenhower Company in 2005?
b. What is the present purchasing power of the Eisenhower Co., in 1956, in 2005?
c. What is the earnings per share (EPS), dividends per share (DPS), and book value per share for the Eisenhower Co., with 5,000 shares outstanding?

(See attachment for table)

2. Based on the value of the dollar in question one and the following salary structure for the Eisenhower Corporation calculate, analyze, and fully discuss the attached assumptions.

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See the attached file.

1. Assume that the U.S. monetary value of a dollar is 100% (e.g., $1.00=$1.00), in 1956. The Eisenhower Company is worth is $5,000,000.00. Compare the monetary value of the dollar of .75 (e.g., $1.00=$.75), in 2005 to the 1956 monetary value:

a. What is the worth of the Eisenhower Company in 2005?
Market to book ratio 1.2
Total assets = $2,000,000
Total debt = $1,000,000
Book value of Equity = Total assets - Total debt = $1,000,000
Market value of equity = Book value*market to book ratio = $1,200,000

Total market value of the company = market value of equity + market value of debt
= $1,200,000+$1,000,000= $2,200,000

Note: The market value of debt is equal to book value unless we have contrary information
Worth of the company in 1956 monetary value = ...

Solution Summary

With all the calculations, the solutions clearly explains the problems and provides conclusions.

$2.19