Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $4.14 per share.Preferred stockCommon stock (300,000 shares at $0.93 par)Paid-in capital in excess of parRetained earningsTotal stockholders' equitya. Show the effects on the firm of a cash dividend of $0.20 per share.b. Show the effects on the firm of a 1% stock dividend.c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends?a. The balance in preferred stock after the $0.20 cash dividend is $(Round to the nearest dollar.)$ 99,000279,000184,000390,000$952,000

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A firm has 750 bonds outstanding that are selling for $989 each, 2,500 shares of preferred stock with a market price of $47 per share, and 30,000 shares of common stock valued at $56 per share. What weight should be assigned to the common stock when computing the firm's weighted average cost of capital? a. 54.00% b. 55.45% c. 66.16% d. 62.08% e. 47.11%
se Home Help Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. $ 1,000,000 700,000 1,700,000 Preferred stock Common stock (140,000 shares at $5 par) Paid-in capital in excess of par Retained earnings gnments 10,000,000 dy Plan Total stockholders' equity $13,400,000 a. What effect on Mammoth's equity account would result from the stock split? b. What chanqe in stock price would you expect to result from the stock split? ults arson eText a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is $ (Round to the nearest dollar.) ltimedia Librai nancial Calculat napter Resource Enter vour answer in the answer box and then click Check Answer. ynamic Study Modules 16 parts remaining Clear All Check…
Determining Cash Dividends to Preferred and Common ShareholdersSinclair Company has outstanding 28,000 shares of $50 par value, 6% cumulative preferred stock and 70,000 shares of $10 par value common stock. The company declares and pays cash dividends amounting to $196,000.a. If there are no preferred dividends in arrears, how much in total dividends, and in dividends per share, does Sinclair pay to each class of stock? Total Dividends Dividends per Share Preferred shareholders: Answer Answer Common shareholders: Answer Answer b. If there are one year’s dividends in arrears on the preferred stock, how much in total dividends, and in dividends per share, does Sinclair pay to each class of stock? Total Dividends Dividends per Share Preferred shareholders: Answer Answer Common shareholders: Answer Answer
Assume that all balance sheet amounts for Sheridan Company represent average balance figures. Stockholders' equity - common Total stockholders' equity Sales revenue Net income Number of shares of common stock Common stock dividends Preferred stock dividends $ 371000 O $2.00 $1.40 $1.94 $2.10 811000 418000 81000 38000 32000 5000 What is the earnings per share for Sheridan? Assume that all balance sheet amounts for Sheridan Company represent average balance figures. What is the earnings per share for Sheridan? $\ $ 200 $ $\$ 1.40 $ $\$ 1.94 $ $\$ 2.10 $
A corporation purchases 9,515 shares of its own $10 par common stock for $18 per share, recording it at cost. What will be the effect on total stockholders' equity? a.decrease by $171,270 b.increase by $171,270 c.decrease by $76,120 d.increase by $76,120
The balance sheet caption for common stock is the following: Common stock, $2 par value, 2,070,000 shares authorized, 1,310, 000 shares issued, 1,050,000 shares outstanding $? Required: a. Calculate the dollar amount that will be presented opposite this caption. b. Calculate the total amount of a cash dividend of $0.27 per share. c. What accounts for the difference between issued shares and outstanding shares? a. Amount b. Cash dividend c. Difference between issued shares and outstanding shares
The stockholders' equity section of Ayayai Corp.'s balance sheet consists of common stock ($7 par) $840,000 and retained earnings $400,000. A 10% stock dividend (12,000 shares) is declared when the market price per share is $15. (a) Show the before-and-after effects of the dividend on the components of stockholders' equity. Before Dividend After Dividend $4 $ $4 (b) Show the before-and-after effects of the dividend on the shares outstanding. Before Dividend After Dividend Outstanding shares >
Assume that a company has the following information: Common Stock Information: # of shares issued and outstanding Par value per share 20,000 $9 Stockholders' Equity section of the Balance Sheet: Common Stock $180,000 Additional Paid in Capital Retained Earnings Total Stockholders' Equity $3,000,000 $4,820,000 $8,000,000 The company has the option of EITHER announcing a 3:1 stock split OR declaring a 200% stock dividend. Fill in the blanks below to show the stockholders' equity balances under each of these options. After After Current 3:1 200% Situation Stock Split Stock Dividend Common Stock Information: # of shares issued and outstanding 20,000 Par value per share $9 Stockholders' Equity section of the Balance Sheet: Common Stock $180,000 Additional Paid in Capital $3,000,000 Retained Earnings $4,820,000 Total Stockholders' Equity $8,000,000 II IIII
The owners' equity accounts for Mars International are shown here: Common stock ($.50 par value) Capital surplus Retained earnings Total owner's equity Please show the equity accounts will change if: a. The company declares a 5-for-1 stock split. How many shares are outstanding now? What is the new par value per share? b. The company declares a 1-for-4 reverse stock split. $20,000 210,000 587,300 $817,300 c. The balance sheet for Mars International is shown below in Market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Equity $817,300 Cash $ 99,660 Fixed assets 717,640 Total $817,300 Total $817,300 The company has declared a dividend of $1.45 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid? d. suppose the company has announced it is going to repurchase $17,400 worth of stock. What effect…
Earnings Per Share Financial statement data for the years ended December 31 for Cottontop Corporation follow: 20Y3 20Y2 Net income Preferred dividends Average number of common shares outstanding 95,000 shares a. Determine the earnings per share for 20Y3 and 20Y2. Round your answers to two dectmal places. per share 20Y2 per share b. Does the change in the earnings per share from 20Y2 to 20Y3 indicate a favorable or unfavorable trend?
Norling Corporation reports the following information: Net income Dividends on common stock Dividends on preferred stock Weighted average common shares outstanding Norling should report earnings per share of O $1.50. O $1.80 O $2.20. O $2.50. $500,000 140,000 60,000 200,000
Stock Dividend Comparison Although Oriole Company has enough retained earnings legally to declare a dividend, its working capital is low. The board of directors is considering a stock dividend instead of a cash dividend. The common stock is currently selling at $33 share. The following is Oriole's current shareholders' equity: Common stock, $10 par $500,000 1,000,000 Additional paid-in capital on common stock Total contributed capital $1,500,000 Retained earnings 1,200,000 $2,700,000 Total shareholders' equity Required: 1. Assuming a 15% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance. Oriole Company Stockholders' Equity Common stock, $10 par Additional paid-in capital on common stock Total contributed capital Retained earnings Total shareholders' equity 2. Assuming, instead, that a 30% stock dividend is declared and issued, prepare the shareholders' equity section immediately after the date of issuance. Oriole…

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