J. Clark Inc. (JCI), a manufacturer and distributer of sports equipment, has grown until it has become a stable
first distribution to shareholders. Shown below are the most recent year's financial statements and projections
ending on June 30). JCI plans to liquidate $500 million of its short-term securities and distribute them on July
but has not yet decided whether to distribute with dividends or with stock repurchases.
Amount of distribution
Number of shares
FCF constant growth rate
Income Statement (Millions of Dollars)
Costs (except depreciation)
Earning before int. & tax
Earnings before taxes
a. Assume first that JCI distributes the $500 million as dividends. Fill in the missing values in the balance shee
labeled "Distribute as Dividends." (Hint: Be sure that the balance sheets balance after you fill in the missing ite
have to establish an account for dividends payable prior to the d...