Jimmy Fu and Moog, Inc
1.
a. Although the stock split increases the number of shares outstanding and the par value stays the same, it will not change the value of stockholder’s equity. The number of shares authorized and issued would remain the same. Class A: 22,910,728 shares * 1.5 = 34,366,092 shares outstanding post-split Class B: 2,794,982 shares * 1.5 = 4,192,473 shares outstanding post-split
b. This would reduce the number of shares outstanding by 112,199 shares and increase the Treasury shares by the same amount. As a result, stockholder’s equity and cash in 2007 would be reduced by 112,199*29.70 = $3,332,310.30. The amount of shares authorized and issued would remain the same.
c. The exercise of employee stock options would increase total stockholder’s equity and assets (cash) by 147,017 *5.09 = $748,316.53. This amount includes an increase of Additional paid-in capital 147,017 * (5.09 – 1) = $601,300. Shares authorized stay the same, but shares issued and outstanding would increase by 147,017 shares.
d. A conversion on a one-for-one basis would not affect the total shares outstanding, authorized, or issued, nor would it affect the stockholder’s equity. However, the transaction would increase outstanding Class A stock by 11,545 shares and decrease outstanding Class B stock by the same number
e. The loss of $16.50 associated with foreign currency translation goes to Other Comprehensive Income and net income would be added to Retained Earnings with the amount of $64.79. The net effect is an increase in shareholder’s equity and assets (cash) of $64.79 - $16.50 = $48.29 million. This transaction does not affect the amount of shares authorized, issued, and outstanding for both class of stock.
2. See Excel spreadsheet for Stockholder's Equity section as of September 29, 2007
3.
a. The proceeds of the sale are $89.125 million. This would increase stockholder’s equity and assets by the same amount. The company uses $84.5 million of
a. Although the stock split increases the number of shares outstanding and the par value stays the same, it will not change the value of stockholder’s equity. The number of shares authorized and issued would remain the same. Class A: 22,910,728 shares * 1.5 = 34,366,092 shares outstanding post-split Class B: 2,794,982 shares * 1.5 = 4,192,473 shares outstanding post-split
b. This would reduce the number of shares outstanding by 112,199 shares and increase the Treasury shares by the same amount. As a result, stockholder’s equity and cash in 2007 would be reduced by 112,199*29.70 = $3,332,310.30. The amount of shares authorized and issued would remain the same.
c. The exercise of employee stock options would increase total stockholder’s equity and assets (cash) by 147,017 *5.09 = $748,316.53. This amount includes an increase of Additional paid-in capital 147,017 * (5.09 – 1) = $601,300. Shares authorized stay the same, but shares issued and outstanding would increase by 147,017 shares.
d. A conversion on a one-for-one basis would not affect the total shares outstanding, authorized, or issued, nor would it affect the stockholder’s equity. However, the transaction would increase outstanding Class A stock by 11,545 shares and decrease outstanding Class B stock by the same number
e. The loss of $16.50 associated with foreign currency translation goes to Other Comprehensive Income and net income would be added to Retained Earnings with the amount of $64.79. The net effect is an increase in shareholder’s equity and assets (cash) of $64.79 - $16.50 = $48.29 million. This transaction does not affect the amount of shares authorized, issued, and outstanding for both class of stock.
2. See Excel spreadsheet for Stockholder's Equity section as of September 29, 2007
3.
a. The proceeds of the sale are $89.125 million. This would increase stockholder’s equity and assets by the same amount. The company uses $84.5 million of