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17-12Problem 17-20Spreadsheet Templates by Block, Hirt and
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Problem 17-12Foundations of Financial ManagementBlock, Hirt and
Danielsen - Fourteenth EditionProblem 17-12Objective: Different
classes of voting stockStudent Name:Course Name:Student ID:Course
Number:Rust Pipe Co. was established in 1994. Four years later the
company went public. At that time, Robert Rust, theoriginal owner,
decided to establish two classes of stock. The first represents
Class A founders stock and is entitledto 10 votes per share. The
normally traded common stock, designated as Class B, is entitled to
one vote per share.In late 2010, Mr. Stone, an investor, was
considering purchasing shares in Rust Pipe Co. While he knew
theexistence of founders shares were not often present in other
companies, he decided to buy the shares anywaybecause of a new
technology Rust Pipe had developed to improve the flow of liquids
through pipes.Of the 1,200,000 total shares currently outstanding,
the original founders family owns 51,325 shares. What is
thepercentage of the founders family votes to Class B
votes?SolutionProblem 17-12InstructionsEnter formulas to calculate
the requirements of this problem.InformationFounder's family
shares51,325Votes per share10Shares outstanding1,200,000Founder's
family votesFORMULAClass B votesFORMULAPercentage of founder's
votes to Class B votesFORMULA
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Irwin&C&8Spreadsheet Template by Block, Hirt and
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Problem 17-20Foundations of Financial ManagementBlock, Hirt and
Danielsen - Fourteenth EditionProblem 17-20Objective: Preferred
stock dividends in arrearsStudent Name:Course Name:Student
ID:Course Number:Robbins Petroleum Company is four years in arrears
on cumulative preferred stock dividends. There are 850,000preferred
shares outstanding, and the annual dividend is $6.50 per share. The
vice-president of finance sees no realhope of paying the dividends
in arrears. She is devising a plan to compensate the preferred
stockholders for 90percent of the dividends in arrears.a. How much
should the compensation be?b. Robbins will compensate the preferred
stockholders in the form of bonds paying 12 percent interest in a
marketenvironment in which the going rate of interest is 14 percent
for similar bonds. The bonds will have a 15-yearmaturity. Using the
bond valuation table in Chapter 16 (Table 163 on page 500),
indicate the market value of a$1,000 par value bond.c. Based on
market value, how many bonds must be issued to provide the
compensation determined in part a?(Round to the nearest whole
number.)SolutionProblem 17-20InstructionsEnter formulas and
functions to calculate the requirements of this
problem.InformationDividend per share$6.50Shares
outstanding850,000Years in arrears4Compensation percentage90%a. How
much should the compensation be?FORMULAb. Robbins will compensate
the preferred stockholders in the form of bonds paying 12 percent
interest in a marketenvironment in which the going rate of interest
is 14 percent for similar bonds. The bonds will have a
15-yearmaturity. Using the bond valuation table in Chapter 16
(Table 163 on page 500), indicate the market value of a$1,000 par
value bond.Bond valueFORMULAc. Based on market value, how many
bonds must be issued to provide the compensation determined in part
a?(Round to the nearest whole number.)FORMULA
&L&8Copyright 2011 McGraw-Hill/
Irwin&C&8Spreadsheet Template by Block, Hirt and
Danielsen&R&8Problem: 17-20NextPrint PreviewCalculatorMain
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