Question

Kms corporation has assets with a market value of 500 million 50 million of which

Answer 1

Answer:
a. Assets – Liabilities = Equity (500 – 200)/10 = 30 b. Assets – asset reduction – liabilities = equity (450 – 200)/10 = 25 c. Assets – asset reduction – liabilities = equity; shares repurchased = 50m/30 [see a.]=1.667 (450 – 200)/(10 – 1.667) = 30 d. Assets – asset reduction – liabilities = equity; debt as before 200/250 = 0.8