please answer all parts within 30 minutes. remember all parts need to be answered. a. What adjustments would have to be made to the capital accounts for a 15 percent stock dividend? Show the new capital accounts(Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).)Capital AccountsCommon stockCapital in excess of parRetained earningsNet worthb. What adjustments would be made to EPS and the stock price? (Assume the P/E ratio remains constant) (Do not round intermedietecalculations and round your answers to 2 decimel pleces)EPSSlock pricec. How many shares would an investor have if he or she originaly had 100? (Do not round intermediate calculations and round yourenswer to the nearest whole shere.)Number of sharesd. What is the investor's total investment worth before and after the stock dividend if the PE ratio remains constant? (Do not roundintermediate calculations and round your answers to the nearest whole dollar.):Total InvestmentBefore stock dividendAlter stock dividende. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous levelof $110 in spite of the fact that the stockholders now have 15 percent more shares Because the cash dividend is not reduced, thestock price is assumed to remain at $48What is an investor's total investment worth after the stock dividend if he/she had 100 shares before the stock dividend?Total investrentf. Under the scenario descnbed in part e, is the investor better off?O YesO Nog. As a final question, what is the dividend yeld on this stock under the scenario described in part e (Input your answer as a percentrounded to 2 decimal places.)Dividend yield Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as followsConmon stock (5,000, 000 shares at $10 par)Capital in excess of parRetalned earnings$ 50,000,00035,e00,00055,000,000Net worth$140,000,000*The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price- Par value).The company's stock is selling for $48 per share. The company had total earnings of $12.000,000 with 5,000,000 shares outstandingand earnings per share were $2.40 The firm has a P/E ratio of 20

In this question, we have to find out the EPS, Price after stock dividend,Value of total investment…

Answered: e answer all parts withi

Business

Accounting

e answer all parts withi

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 3P

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.
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Health Systems Inc. is considering a 15 percent stock dividend. The capital accounts are as follows: Common stock (3,500,000 shares at $10 par) $ 35,000,000 Capital in excess of par* 10,000,000 Retained earnings 45,000,000 Net worth $ 90,000,000 *The increase in capital in excess of par as a result of a stock dividend is equal to the shares created times (Market price – Par value). The company’s stock is selling for $28 per share. The company had total earnings of $7,000,000 with 3,500,000 shares outstanding and earnings per share were $2.00. The firm has a P/E ratio of 14. e. Assume Mr. Heart, the president of Health Systems, wishes to benefit stockholders by keeping the cash dividend at a previous level of $1.15 in spite of the fact that the stockholders now have 15 percent more shares. Because the cash dividend is not reduced, the stock price is assumed to remain at $28. What is an investor’s total investment worth after the stock dividend if he/she…
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