Dividend constraints The Howe Company's stockholders' equity account is as follows: The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the $2.1 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) b. If the firm has $180,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b. d. Indicate the effects of an $80,000 cash dividend on stockholders' equity. a. The maximum dividend per share that the firm can is $ (Round to the nearest cent.) C...
Dividend constraints The Howe Company's stockholders' equity account is as follows: The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the $2.1 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) b. If the firm has $180,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b. d. Indicate the effects of an $80,000 cash dividend on stockholders' equity. a. The maximum dividend per share that the firm can is $ (Round to the nearest cent.) C...
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
Problem 1PS
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Transcribed Image Text:Dividend constraints The Howe Company's stockholders' equity account is as follows:
have been included as part of the $2.1 million retained earnings.
a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.)
b. If the firm has $180,000 in cash, what is the largest per-share dividend it can pay without borrowing?
The earnings available for common stockholders from this period's operations are $100,000, which
c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b.
d. Indicate the effects of an $80,000 cash dividend on stockholders' equity.
a. The maximum dividend per share that the firm can is $
(Round to the nearest cent.)
Transcribed Image Text:Data table
Common stock (700,000 shares at $7 par)
Paid-in capital in excess of par
Retained earnings
Total stockholders' equity
Print
Done
$4,900,000
4,000,000
2,100,000
$11,000,000
X
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