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Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. The capital accounts for the firm are as follows: Common stock (3,000,000 shares at $5 par) Capital in excess of par* Retained earnings Net worth $ 15,000,000 6,000,000 24,000,000 $ 45,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price - Par value). The company's stock is selling for $10 per share. The company had total earnings of $3,000,000 during the year. With 3,000,000 shares outstanding, earnings per share were $1. The firm has a P/E ratio of 10. a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. Note: Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000). Common stock Capital in excess of par Retained earnings Net worth $

Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. The capital accounts for the firm are as follows: Common stock (3,000,000 shares at $5 par) Capital in excess of par* Retained earnings Net worth $ 15,000,000 6,000,000 24,000,000 $ 45,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price - Par value). The company's stock is selling for $10 per share. The company had total earnings of $3,000,000 during the year. With 3,000,000 shares outstanding, earnings per share were $1. The firm has a P/E ratio of 10. a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. Note: Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000). Common stock Capital in excess of par Retained earnings Net worth $

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. The capital accounts for the firm are as follows: Common stock (3,000,000 shares at $5 par) Capital in excess of par* Retained earnings Net worth $ 15,000,000 6,000,000 24,000,000 $ 45,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price - Par value). The company's stock is selling for $10 per share. The company had total earnings of $3,000,000 during the year. With 3,000,000 shares outstanding, earnings per share were $1. The firm has a P/E ratio of 10. a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. Note: Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000). Common stock Capital in excess of par Retained earnings Net worth $ 0
Transcribed Image Text:Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend. The capital accounts for the firm are as follows: Common stock (3,000,000 shares at $5 par) Capital in excess of par* Retained earnings Net worth $ 15,000,000 6,000,000 24,000,000 $ 45,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price - Par value). The company's stock is selling for $10 per share. The company had total earnings of $3,000,000 during the year. With 3,000,000 shares outstanding, earnings per share were $1. The firm has a P/E ratio of 10. a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. Note: Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000). Common stock Capital in excess of par Retained earnings Net worth $ 0
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