Digby\'s balance sheet has $66,911,000 in equity. Further, the company is expect

Question

Digby's balance sheet has $66,911,000 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 Digby's book value? Select: 1 A)$65,911,000 B)$27,252,000 C)$37,252,000 D) $75,911,000 Digby's balance sheet has $66,911,000 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 Digby's book value? Select: 1 A)$65,911,000 B)$27,252,000 C)$37,252,000 D) $75,911,000 Digby's balance sheet has $66,911,000 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 Digby's book value? Select: 1 A)$65,911,000 B)$27,252,000 C)$37,252,000 D) $75,911,000

Explanation / Answer

Answer:

Equity = $66,911,000

Expected Net income = $4,000,000

Expected dividends = $5,000,000

Digby's book value = Equity + Expected net income - Expected dividends

= $66,911,000 + $4,000,000 - $5,000,000

= $65,911,000

Option A is the answer.

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