Question - Consider the following 2010 balance sheet data for Funny Mae:
Assets
Cash 41000
Accounts Receivable 50000
Inventory: 175000
Factory, at cost 500000
Less accumulated depreciation 335000
Net fixed assets1 400000
Land 145000
Total assets 811000
Liabilities and stockholder's equity
Notes payable 142000
Accounts payable 80000
Very long-term mortgage bonds 275000
Preferred stock2 30000
Common stock3 150000
Capital surplus 75000
Retained earnings 59000
Total liabilities and stockholder's equity 811000
1. Pools of subprime mortgages that cannot be easily converted into cash are included here.
2. Preferred stocks are not convertible, pay 3% on notional (100 dollars), there are 300 preferred shares outstanding.
3. Common stocks have a notional of 10 dollars, there are 15000 common outstanding.
Required -
a) Based on the information given, calculate the firm's working capital.
b) In 2010, the company earned an after-tax net income of $20,000 and paid dividends to common stockholders of $15,900. What were the earnings and dividends per share?
c) Funny Mae has only issued common stock during its Initial Public Offering (IPO). What was the market price per share at the time of issuance?