Jersey Medical earns $10.00 a share, sells for $100, and pays a $4 per share dividend. The stock is split four for one and a $1 per share cash dividend is declared. a. What will be the new price of the stock? Round your answer to the nearest dollar. $ b. If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place. Payout ratio before the split: Payout ratio after the split: % %
Jersey Medical earns $10.00 a share, sells for $100, and pays a $4 per share dividend. The stock is split four for one and a $1 per share cash dividend is declared. a. What will be the new price of the stock? Round your answer to the nearest dollar. $ b. If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place. Payout ratio before the split: Payout ratio after the split: % %
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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![Jersey Medical earns $10.00 a share, sells for $100, and pays a $4 per share dividend. The stock is split four for one and a $1 per share cash dividend is declared.
a. What will be the new price of the stock? Round your answer to the nearest dollar.
$
b. If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place.
Payout ratio before the split:
Payout ratio after the split:
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9d1282c1-8c68-462d-9f98-98ae0716818d%2Fa5c87133-86cf-4d98-85bb-2d7cf464949f%2Fdds9df_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Jersey Medical earns $10.00 a share, sells for $100, and pays a $4 per share dividend. The stock is split four for one and a $1 per share cash dividend is declared.
a. What will be the new price of the stock? Round your answer to the nearest dollar.
$
b. If the firm's total earnings do not change, what is the payout ratio before and after the stock split? Round your answers to one decimal place.
Payout ratio before the split:
Payout ratio after the split:
%
%
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