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a) If the company has only 1,000,000 shares at the start of the exercise period, then the cumulative earnings of the stock are $12.5 per share over the first one year, $18.9 over the next two years, $24.3 over the next three years, etc. b) If the company has 23,990,000 shares at the start of the exercise period, then the cumulative earnings of the stock are $23.67 per share over the first one year, $28.23 over the next two years, $34.

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76 over the next three years, etc. c) If the company has 33,200,000 shares at the start of the exercise period, then the cumulative earnings of the stock are $34.22 per click for source over the first one year, $38.41 over the next two years, $43.43 over the next three years, etc. d) If the company has 44,000,000 shares at the start of the exercise period, then the cumulative earnings of the stock are $44.00 per share over the first one year, $50.

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60 over the next two years, $58.20 over the next three years, etc. 3. A corporate parent purchases $1,000,000 of common stock from its subsidiary for $10,000,000. Calculate the stock’s value when the three following scenarios occur independently: a) The corporate parent merges with the subsidiary. b) The corporate parent acquires a second subsidiary and remains a 50-50 subsidiary. c) The corporate parent sells the common stock it did not buy to some third party.

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4. The discounted cash flow method requires a stock’s owners to agree, at the time the shares were purchased, to consider future cash flows and to discount these future cash flows. a) If a corporation were to give away its first product at a ten-dollar price forever even though it gained $700,000 a year for 20 years, would the assets of the corporation be worth only $90,000 or would the assets be worth $130,000? explain. b) Say a corporation was required to purchase a second item at a ten-dollar price payable over twenty years. The corporation would agree to pay $10,000 in cash during this six-month grace period. If the second item was $1 million, how many (if any) years after the first item was handed out would the corporation have to pay its first item before giving the second item away? explain. c) If the first item were a $1,000,000-book publisher and the second item were 10,000 copiesTake My Online Operations Management Exam Questions at ExamTest.

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