Question

Baldwin's balance sheet has $82,841,000 in equity. Further, the company is expecting net income of 4,000,000 next year, and also expecting to pay $5,000,000 in dividends. If there is no new stock issued what will be Baldwin's book value

Answer 1

Answer: Baldwin's book value is $81,841,000.

Explanation: Baldin's balance sheet has $82,841,000 in equity, the net income of $4,000,000, which the company is expecting would be added to the equity while the dividend of $5,000,000, which the company is also expecting to pay out would be deducted. After all this exercise, the book value of the company would therefore become $81,841,000.