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    Finance Questions - The XYZ Electric Company

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    Total Assets: $12,500,000
    Total Liabilities: $8,500,000
    Common Shares Outstanding: 200,000
    Preferred Shares Outstanding: 50,000
    Common Stock Par Value: $1
    Preferred Stock Par Value: $50
    Common Stock Dividends: $200,000
    Preferred Stock Dividends: $150,000
    Earnings After Taxes: $500,000

    What is the EPS?
    What is the book value per share?

    The XYZ Electric Company has analyzed sales projections for the coming year based
    on the projected weather for the summer. XYZ believes that revenue will be
    $22,000,000 if the summer is unseasonably cool, $30,000,000 if the summer is
    average, and $41,000,000 if the summer is unseasonably hot. Weather forecasters
    project that the probability of an unseasonably hot summer is 30% and an
    unseasonably cool summer is 25%. What is the expected value of XYZ's sales for
    the coming year?

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    Solution Preview

    Total Assets: $12,500,000
    Total Liabilities: $8,500,000
    Common Shares Outstanding: 200,000
    Preferred Shares Outstanding: 50,000
    Common Stock Par Value: $1
    Preferred Stock Par Value: $50
    Common Stock Dividends: $200,000
    Preferred Stock Dividends: $150,000
    Earnings After Taxes: $500,000

    What is the EPS?

    EPS = Earnings After Taxes/Common Shares Outstanding
    = 500,000/200,000
    = 2.50 per share

    What is the book value per share? ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the EPS, what is the book value per share, and what is the expected value of XYZ's sales for the coming year.

    $2.19

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