Complete the following exercise. Fill in the Excel spreadsheet provided via the

Question

Complete the following exercise. Fill in the Excel spreadsheet provided via the link below to provide your answers to parts a, b, and c. Then paste the Excel data into a Word document on which you can also write the answer to part d. Label each exercise or problem clearly. Use APA formatting and citation if needed. Uzi Company received a charter granting the right to issue 200,000 shares of $1.00 par value common stock and 10,000 shares of 8% cumulative and nonparticipating, $50.00 par value preferred stock that is callable at $80.00 per share. Selected transactions are presented below. Determine the book value per preferred share and per common stock as of December 31, 20X2. Provide a rationale between 200 and 300 words in length for buying or not buying this stock based on the financial information presented.

Explanation / Answer

Determination of Book Value of December 31,2002: 2001 Common Stock Outstanding Shares 19-Feb 45000 45000 22-Feb 50000 30000 30-Mar 250000 100000 BV 345000 175000 1.971429 Preferred Stock Outstanding Shares 12-Jan 75000 1000 BV 75000 1000 75 Notes: 2002 2003 Income Summary -25000 69000 Less: Perferred Stock Dividend 0 4000 Earning for Equity -25000 65000 No of Shares 175000 175000 EPS -0.142857143 0.371428571 As dervied from the calculation above it can be said that the stock should be purchased because during the intial year there was a loss it may be due to heavy preliminary cost and from the next year itself the stock is started giving dividend as well as growth.

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