Description
Part 2
Complete a 1,050-word summary of findings and recommendations from the following questions:
- What is the par or stated value per share of Apple's common stock?
- What percentage of Apple's authorized common stock was issued at September 27, 2014?
- How many shares of common stock were outstanding at September 28, 2013, and at September 27, 2014?
- Calculate the payout ratio, earnings per share, and return on common stockholders' equity for 2014.
Use the Week 5 Excel® spreadsheet and submit with your analysis and summary.
Click the Assignment Files tab to submit your assignment.
Explanation & Answer
Attached.
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Analysis of Stockholders’ Equity: Apple, Inc.
Financial capital is of paramount importance in order to get a company moving. This type of
capital comes from two major sources of capital, they are equity and debts. The debt capital
refers to borrowed funds that must be repaid at a later time, this usually is accompanied with
interest. Of importance, the major types of debt capital are bank loans, personal loans, overdraft
agreements and credit card debt. Equity capital is derived from the sale of stock, either common
or preferred shares. These funds are not usually repaid; even though investors expect a certain
rate of return (White, 2015). Stockholders’ equity is one of three elements of a company’ s
balance sheet. The simplified accounting formula, which is assets = liabilities + stockholders’
equity. As such, stockholders’ equity is split into paid in capital, retained earnings, and treasury
stock.
Thorough analysis of these equations provides a strong foundation upon which business
decisions are made, such as how much to invest as stock and how much to dissolve. There are
quite a few available tools that are used to analysis the different financial statements. The
content being analyzed will be from Apple, Inc.’ s consolidated financial statements balance
sheet as given in the company’ s 2014 annual report. Stockholders’ equity will be the main
focus of the balance sheet, also we will calculate dividend payout ratio, earnings per share, and
return on common stockholders’ equity
What is the par or stated value per share of Apple’ s common stock?
The par or stated value of common stock of Apple, Inc. is $0.00001.
The par or stated value is not directly related with the market price of the stock.
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What this means is that each stock is estimated to sell at $0.00001.
Of importance, some stock may sell above par value and this is known as selling at premium.
While some stock may as well sell at prices below par value or face value and this is known as
selling at discount.
What percentage of Apple’ s authorized common stock was issued at September 27, 2014?
Authorized common stock means the highest number of shares that a corporation is legally
permitted to issue, as it is specified in its articles of incorporation. Apple, Inc. has authorized
common stock shares of 12,600,000.
Apple had 5,866,161 shares issued and outstanding as of September 27, 2014. To arrive at the
percentage of authorized common stock issued would be, the number of shares issued and
outstanding, which is 5,866,161,000 divided by total number of authorized common stock, which
is 12,600,000.
So, the formula would look like: 5,866,161 / 12,600,000 = 46.56%. Apple, Inc. has issued
46.56% of its authorized common stock to share...
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