Purchase Solution

Stock split - Keys;Cash flow - Feel Good;Receivable-Murtaugh

Not what you're looking for?

Ask Custom Question

Keys Financial has done extremely well in recent years, and its stock now sells for $175 per share. Management wants to get the price down to a more typical level, which it thinks is $25 per share. What stock split would be required to get to this price, assuming the transaction has no effect on the total market value? Put another way, how many new shares should be given per one old share?

Feel Good Inc. expects to have sales of $30,000 in January, $33,000 in February, and $38,000 in March. If 20% of all sales are for cash, 40% are on credit and are paid in the month following the sale, and 40% are on credit and are paid 2 months following the sale, what cash flow from sales is expected in March?

Murtaugh Manufacturing sells on terms of 2/15, net 40. Total annual sales are $950,000. 40% of the customers pay on the 15th day and take discounts, and the remainder pay, on average, 50 days after their purchases. All sales and receivables are recorded net of discounts, regardless of whether or not discounts are actually taken. What is the firm's accounts receivable balance?

Purchase this Solution
Solution Summary

The solution analyze stock split for Keys; cash flow for Feel Good; receivable balance for Murtaugh

Solution Preview

Keys Financial - Since there is no effect on total market value; we need to simply divided 175 by 25. We have 7 as the answer. Hence 7 new shares will be issued for each current share holding. Proof $175 = $25 * ...

Purchase this Solution
Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Stocks, equity, dividends

    It may not be good for current holders because a stock split just increases the number of stocks at a lower rate rather than increases the price of the stock when the split happens.

  • Multiple Choice

    If the corporation issues a 5-for-1 stock split, the par value of the stock will be _______.

  • Transaction Effects on Financial Ratios

    Split the common stock 2 for 1. Book value per share of common stock b. Collected accounts receivable. Number of days' sales in accounts receivable c. Issued common stock for cash.

  • Various Multiple Choice Questions

    Toombs Media Corp. recently completed a 3-for-1 stock split. Prior to the split, its stock sold for $150 per share. The firm's total market value was unchanged by the split.

  • Capital Budgeting, Stock Split, Credit terms

    Costco recently announced a 3-for-1 stock split. Prior to the split, the company's stock was trading at $90 per share. The split had no effect on the wealth of the company's investors. What will be the new stock price? 4.

  • Preparing journal entries

    (a) Prepare the journal entries on the appropriate dates to record the stock dividend and the stock split. Debit & Credit Accounts Debit Credit E.g. Dr. Cash 200 Cr.

  • Ratios

    289157 Cash flow & analytical measures Please help me finding good answers for 2 problems. Thank you. The net income reported on an income statement for the current year was $55,000.

  • Financial Accounting Problems

    on total paid-in capital of a stock dividend and a stock split, respectively?

  • Assume you are the product manager of a large, internationally known company that manufactures consumer products...

    In a 2-for-1 stock split, every shareholder with one stock is given an additional share. So, if a company had 10 million shares outstanding before the split, it will have 20 million shares outstanding after a 2-for-1 split.

View More Related Solutions