FIN 3501 FIN3501 Week 5 Individual Work 1 Corporation Financial Performance (Everest University)

FIN 3501 Week 5 Individual Work 1 Corporation Financial Performance (Everest University)

Questions 5, 6, 9, and 11:

    5. What are the advantages associated with dividend reinvestment plans?

     6. How do stock dividends differ from cash dividend, how do stock dividends differ from stock splits?

    9. If a preferred stock is in arrearage, what does that imply about the dividend payment?

    11. What does the statement of cash flows add to the analyst’s knowledge of the firm?

Problem 2:

    2. A firm has the following items on its balance sheet:

         Cash= $20,000,000

         Inventory= $134,000,000

         Notes payable to bank= $31,500,000

          Common stock= ($10 par; 1,000,000 shares outstanding $10,000,000

          Retained earnings= $98,500,000

        Describe how each of these accounts would appear after the following:

Problem 4:

    You have taken the following information from a firm’s financial statements. As an investor in the firm’s debt instruments, you are concerned with its liquidity position and its use of financial leverage. What conclusions can you draw from this information?